Correlation Between Payment Financial and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Payment Financial 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 Payment Financial and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payment Financial Technologies and Harel Insurance Investments, you can compare the effects of market volatilities on Payment Financial 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 Payment Financial with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payment Financial and Harel Insurance.
Diversification Opportunities for Payment Financial and Harel Insurance
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payment and Harel is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Payment Financial Technologies 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 Payment Financial 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 Payment Financial Technologies 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 Payment Financial i.e., Payment Financial and Harel Insurance go up and down completely randomly.
Pair Corralation between Payment Financial and Harel Insurance
Assuming the 90 days trading horizon Payment Financial Technologies is expected to generate 2.89 times more return on investment than Harel Insurance. However, Payment Financial is 2.89 times more volatile than Harel Insurance Investments. It trades about 0.37 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.6 per unit of risk. If you would invest 25,581 in Payment Financial Technologies on August 29, 2024 and sell it today you would earn a total of 8,853 from holding Payment Financial Technologies or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payment Financial Technologies vs. Harel Insurance Investments
Performance |
| Timeline |
| Payment Financial |
| Harel Insurance Inve |
Payment Financial and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payment Financial and Harel Insurance
The main advantage of trading using opposite Payment Financial and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payment Financial 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.| Payment Financial vs. Automatic Bank Services | Payment Financial vs. Opal Balance | Payment Financial vs. B Communications | Payment Financial vs. Holmes Place International |
| Harel Insurance vs. Elbit Systems | Harel Insurance vs. Discount Investment Corp | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. AudioCodes |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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