Correlation Between Bank Hapoalim and Technoplus Ventures
Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and Technoplus Ventures 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 Technoplus Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and Technoplus Ventures, you can compare the effects of market volatilities on Bank Hapoalim and Technoplus Ventures 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 Technoplus Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Technoplus Ventures.
Diversification Opportunities for Bank Hapoalim and Technoplus Ventures
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Technoplus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Technoplus Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technoplus Ventures 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 Technoplus Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technoplus Ventures has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Technoplus Ventures go up and down completely randomly.
Pair Corralation between Bank Hapoalim and Technoplus Ventures
Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 1.77 times less return on investment than Technoplus Ventures. But when comparing it to its historical volatility, Bank Hapoalim is 2.25 times less risky than Technoplus Ventures. It trades about 0.13 of its potential returns per unit of risk. Technoplus Ventures is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 71,840 in Technoplus Ventures on August 29, 2024 and sell it today you would earn a total of 51,560 from holding Technoplus Ventures or generate 71.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Bank Hapoalim vs. Technoplus Ventures
Performance |
| Timeline |
| Bank Hapoalim |
| Technoplus Ventures |
Bank Hapoalim and Technoplus Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Hapoalim and Technoplus Ventures
The main advantage of trading using opposite Bank Hapoalim and Technoplus Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, Technoplus Ventures 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 Technoplus Ventures will offset losses from the drop in Technoplus Ventures' 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 |
| Technoplus Ventures vs. Bank Hapoalim | Technoplus Ventures vs. Israel Discount Bank | Technoplus Ventures vs. Bezeq Israeli Telecommunication | Technoplus Ventures vs. Elbit Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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