Correlation Between Bank Hapoalim and IDI Insurance
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and IDI 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 Bank Hapoalim and IDI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and IDI Insurance, you can compare the effects of market volatilities on Bank Hapoalim and IDI 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 Bank Hapoalim with a short position of IDI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and IDI Insurance.
Diversification Opportunities for Bank Hapoalim and IDI Insurance
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and IDI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and IDI Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI Insurance 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 IDI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI Insurance has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and IDI Insurance go up and down completely randomly.
Pair Corralation between Bank Hapoalim and IDI Insurance
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.68 times more return on investment than IDI Insurance. However, Bank Hapoalim is 1.48 times less risky than IDI Insurance. It trades about 0.47 of its potential returns per unit of risk. IDI Insurance is currently generating about 0.16 per unit of risk. If you would invest 382,800 in Bank Hapoalim on August 25, 2024 and sell it today you would earn a total of 38,200 from holding Bank Hapoalim or generate 9.98% 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. IDI Insurance
Performance |
| Timeline |
| Bank Hapoalim |
| IDI Insurance |
Bank Hapoalim and IDI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and IDI Insurance
The main advantage of trading using opposite Bank Hapoalim and IDI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, IDI 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 IDI Insurance will offset losses from the drop in IDI Insurance'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 |
| IDI Insurance vs. Harel Insurance Investments | IDI Insurance vs. Migdal Insurance | IDI Insurance vs. Menora Miv Hld | IDI Insurance vs. The Phoenix Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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