Correlation Between Bank Hapoalim and Rimoni
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Rimoni 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 Rimoni into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Rimoni, you can compare the effects of market volatilities on Bank Hapoalim and Rimoni 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 Rimoni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Rimoni.
Diversification Opportunities for Bank Hapoalim and Rimoni
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Rimoni is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Rimoni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimoni 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 Rimoni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimoni has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Rimoni go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Rimoni
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.59 times more return on investment than Rimoni. However, Bank Hapoalim is 1.7 times less risky than Rimoni. It trades about 0.19 of its potential returns per unit of risk. Rimoni is currently generating about 0.05 per unit of risk. If you would invest 329,012 in Bank Hapoalim on September 3, 2024 and sell it today you would earn a total of 87,688 from holding Bank Hapoalim or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim vs. Rimoni
Performance |
| Timeline |
| Bank Hapoalim |
| Rimoni |
Bank Hapoalim and Rimoni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Rimoni
The main advantage of trading using opposite Bank Hapoalim and Rimoni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Rimoni 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 Rimoni will offset losses from the drop in Rimoni'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 |
| Rimoni vs. Elbit Systems | Rimoni vs. Bezeq Israeli Telecommunication | Rimoni vs. Bank Hapoalim | Rimoni 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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