Correlation Between Bank Hapoalim and Amot Investments
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Amot Investments 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 Amot Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Amot Investments, you can compare the effects of market volatilities on Bank Hapoalim and Amot Investments 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 Amot Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Amot Investments.
Diversification Opportunities for Bank Hapoalim and Amot Investments
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Amot is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Amot Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amot Investments 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 Amot Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amot Investments has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Amot Investments go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Amot Investments
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.89 times more return on investment than Amot Investments. However, Bank Hapoalim is 1.12 times less risky than Amot Investments. It trades about 0.08 of its potential returns per unit of risk. Amot Investments is currently generating about 0.03 per unit of risk. If you would invest 285,961 in Bank Hapoalim on August 27, 2024 and sell it today you would earn a total of 135,039 from holding Bank Hapoalim or generate 47.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim vs. Amot Investments
Performance |
| Timeline |
| Bank Hapoalim |
| Amot Investments |
Bank Hapoalim and Amot Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Amot Investments
The main advantage of trading using opposite Bank Hapoalim and Amot Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Amot Investments 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 Amot Investments will offset losses from the drop in Amot Investments' long position.| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Bezeq Israeli Telecommunication | Bank Hapoalim vs. Elbit Systems |
| Amot Investments vs. Israel Canada | Amot Investments vs. Delek Group | Amot Investments vs. Shikun Binui | Amot Investments 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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