Correlation Between Bank Hapoalim and Infimer
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Infimer 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 Infimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Infimer, you can compare the effects of market volatilities on Bank Hapoalim and Infimer 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 Infimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Infimer.
Diversification Opportunities for Bank Hapoalim and Infimer
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Infimer is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Infimer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infimer 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 Infimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infimer has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Infimer go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Infimer
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 343.11 times less return on investment than Infimer. But when comparing it to its historical volatility, Bank Hapoalim is 277.72 times less risky than Infimer. It trades about 0.24 of its potential returns per unit of risk. Infimer is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,900,000 in Infimer on September 3, 2024 and sell it today you would lose (1,899,850) from holding Infimer or give up 99.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim vs. Infimer
Performance |
| Timeline |
| Bank Hapoalim |
| Infimer |
Bank Hapoalim and Infimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Infimer
The main advantage of trading using opposite Bank Hapoalim and Infimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Infimer 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 Infimer will offset losses from the drop in Infimer'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 |
| Infimer vs. Elbit Systems | Infimer vs. Bezeq Israeli Telecommunication | Infimer vs. Bank Hapoalim | Infimer vs. Teva Pharmaceutical Industries |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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