Correlation Between Bank Hapoalim and Strauss
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Strauss 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 Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Strauss Group, you can compare the effects of market volatilities on Bank Hapoalim and Strauss 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 Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Strauss.
Diversification Opportunities for Bank Hapoalim and Strauss
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Strauss is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group 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 Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Strauss go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Strauss
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.94 times more return on investment than Strauss. However, Bank Hapoalim is 1.06 times less risky than Strauss. It trades about 0.08 of its potential returns per unit of risk. Strauss Group is currently generating about -0.01 per unit of risk. If you would invest 291,921 in Bank Hapoalim on August 29, 2024 and sell it today you would earn a total of 138,079 from holding Bank Hapoalim or generate 47.3% 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. Strauss Group
Performance |
| Timeline |
| Bank Hapoalim |
| Strauss Group |
Bank Hapoalim and Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Strauss
The main advantage of trading using opposite Bank Hapoalim and Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Strauss 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 Strauss will offset losses from the drop in Strauss' 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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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