Correlation Between Bank Hapoalim and Danel
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Danel 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 Danel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Danel, you can compare the effects of market volatilities on Bank Hapoalim and Danel 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 Danel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Danel.
Diversification Opportunities for Bank Hapoalim and Danel
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Danel is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Danel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danel 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 Danel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danel has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Danel go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Danel
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 2.8 times less return on investment than Danel. In addition to that, Bank Hapoalim is 1.28 times more volatile than Danel. It trades about 0.14 of its total potential returns per unit of risk. Danel is currently generating about 0.52 per unit of volatility. If you would invest 3,846,651 in Danel on September 13, 2024 and sell it today you would earn a total of 431,349 from holding Danel or generate 11.21% 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. Danel
Performance |
| Timeline |
| Bank Hapoalim |
| Danel |
Bank Hapoalim and Danel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Danel
The main advantage of trading using opposite Bank Hapoalim and Danel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Danel 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 Danel will offset losses from the drop in Danel's long position.| Bank Hapoalim vs. Bank Leumi Le Israel | Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Mizrahi Tefahot | Bank Hapoalim vs. Bezeq Israeli Telecommunication |
| Danel vs. Aran Research and | Danel vs. Al Bad Massuot Yitzhak | Danel vs. Analyst IMS Investment | Danel vs. Golan Plastic |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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