Correlation Between Bank Hapoalim and Israel Canada
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Israel Canada 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 Israel Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Israel Canada, you can compare the effects of market volatilities on Bank Hapoalim and Israel Canada 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 Israel Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Israel Canada.
Diversification Opportunities for Bank Hapoalim and Israel Canada
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Israel is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Israel Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Canada 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 Israel Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Canada has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Israel Canada go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Israel Canada
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 1.34 times less return on investment than Israel Canada. But when comparing it to its historical volatility, Bank Hapoalim is 1.7 times less risky than Israel Canada. It trades about 0.08 of its potential returns per unit of risk. Israel Canada is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 104,824 in Israel Canada on September 12, 2024 and sell it today you would earn a total of 50,876 from holding Israel Canada or generate 48.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Bank Hapoalim vs. Israel Canada
Performance |
| Timeline |
| Bank Hapoalim |
| Israel Canada |
Bank Hapoalim and Israel Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Israel Canada
The main advantage of trading using opposite Bank Hapoalim and Israel Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Israel Canada 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 Israel Canada will offset losses from the drop in Israel Canada'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 |
| Israel Canada vs. Azrieli Group | Israel Canada vs. Shikun Binui | Israel Canada vs. Ashtrom Group | Israel Canada vs. Enlight Renewable Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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