Correlation Between Bank Hapoalim and Shikun Binui
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Shikun Binui 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 Shikun Binui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Shikun Binui, you can compare the effects of market volatilities on Bank Hapoalim and Shikun Binui 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 Shikun Binui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Shikun Binui.
Diversification Opportunities for Bank Hapoalim and Shikun Binui
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Shikun is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Shikun Binui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shikun Binui 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 Shikun Binui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shikun Binui has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Shikun Binui go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Shikun Binui
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 1.74 times less return on investment than Shikun Binui. But when comparing it to its historical volatility, Bank Hapoalim is 1.14 times less risky than Shikun Binui. It trades about 0.47 of its potential returns per unit of risk. Shikun Binui is currently generating about 0.72 of returns per unit of risk over similar time horizon. If you would invest 91,300 in Shikun Binui on August 25, 2024 and sell it today you would earn a total of 16,400 from holding Shikun Binui or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Hapoalim vs. Shikun Binui
Performance |
| Timeline |
| Bank Hapoalim |
| Shikun Binui |
Bank Hapoalim and Shikun Binui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Shikun Binui
The main advantage of trading using opposite Bank Hapoalim and Shikun Binui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Shikun Binui 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 Shikun Binui will offset losses from the drop in Shikun Binui'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 |
| Shikun Binui vs. Israel Discount Bank | Shikun Binui vs. Bezeq Israeli Telecommunication | Shikun Binui vs. Azrieli Group | Shikun Binui vs. Bank Hapoalim |
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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