Correlation Between Photomyne and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Photomyne and Harel Insurance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Photomyne and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photomyne and Harel Insurance Investments, you can compare the effects of market volatilities on Photomyne and Harel Insurance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Photomyne with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Harel Insurance.
Diversification Opportunities for Photomyne and Harel Insurance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Photomyne and Harel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Photomyne is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Photomyne are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Photomyne i.e., Photomyne and Harel Insurance go up and down completely randomly.
Pair Corralation between Photomyne and Harel Insurance
Assuming the 90 days trading horizon Photomyne is expected to generate 1.3 times more return on investment than Harel Insurance. However, Photomyne is 1.3 times more volatile than Harel Insurance Investments. It trades about 0.07 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.08 per unit of risk. If you would invest 161,000 in Photomyne on September 13, 2024 and sell it today you would earn a total of 140,400 from holding Photomyne or generate 87.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photomyne vs. Harel Insurance Investments
Performance |
| Timeline |
| Photomyne |
| Harel Insurance Inve |
Photomyne and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photomyne and Harel Insurance
The main advantage of trading using opposite Photomyne and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photomyne position performs unexpectedly, Harel Insurance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Harel Insurance will offset losses from the drop in Harel Insurance's long position.| Photomyne vs. Nice | Photomyne vs. WhiteSmoke Software | Photomyne vs. Abra Information Technologies | Photomyne vs. Nrgene Technologies |
| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Mizrahi Tefahot | Harel Insurance vs. Bezeq Israeli Telecommunication |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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