Correlation Between Bank Hapoalim and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Alony Hetz 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 Bank Hapoalim and Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Alony Hetz Properties, you can compare the effects of market volatilities on Bank Hapoalim and Alony Hetz 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 Bank Hapoalim with a short position of Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Alony Hetz.
Diversification Opportunities for Bank Hapoalim and Alony Hetz
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Alony is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties and Bank Hapoalim 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 Bank Hapoalim are associated (or correlated) with Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Alony Hetz go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Alony Hetz
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.64 times more return on investment than Alony Hetz. However, Bank Hapoalim is 1.56 times less risky than Alony Hetz. It trades about 0.06 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about -0.01 per unit of risk. If you would invest 287,695 in Bank Hapoalim on August 27, 2024 and sell it today you would earn a total of 133,305 from holding Bank Hapoalim or generate 46.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim vs. Alony Hetz Properties
Performance |
| Timeline |
| Bank Hapoalim |
| Alony Hetz Properties |
Bank Hapoalim and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Alony Hetz
The main advantage of trading using opposite Bank Hapoalim and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Alony Hetz 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 Alony Hetz will offset losses from the drop in Alony Hetz's long position.| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Bezeq Israeli Telecommunication | Bank Hapoalim vs. Elbit Systems |
| Alony Hetz vs. Amot Investments | Alony Hetz vs. Azrieli Group | Alony Hetz vs. Melisron | Alony Hetz vs. Israel Discount Bank |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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