Correlation Between Retailors and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Retailors and Harel Insurance 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 Retailors and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retailors and Harel Insurance Investments, you can compare the effects of market volatilities on Retailors and Harel Insurance 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 Retailors with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retailors and Harel Insurance.
Diversification Opportunities for Retailors and Harel Insurance
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retailors and Harel is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Retailors and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Retailors 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 Retailors are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Retailors i.e., Retailors and Harel Insurance go up and down completely randomly.
Pair Corralation between Retailors and Harel Insurance
Assuming the 90 days trading horizon Retailors is expected to generate 1.48 times less return on investment than Harel Insurance. In addition to that, Retailors is 1.76 times more volatile than Harel Insurance Investments. It trades about 0.13 of its total potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.33 per unit of volatility. If you would invest 361,900 in Harel Insurance Investments on August 30, 2024 and sell it today you would earn a total of 67,600 from holding Harel Insurance Investments or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retailors vs. Harel Insurance Investments
Performance |
| Timeline |
| Retailors |
| Harel Insurance Inve |
Retailors and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retailors and Harel Insurance
The main advantage of trading using opposite Retailors and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retailors position performs unexpectedly, Harel Insurance 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 Harel Insurance will offset losses from the drop in Harel Insurance's long position.| Retailors vs. Nice | Retailors vs. The Gold Bond | Retailors vs. Bank Leumi Le Israel | Retailors vs. ICL Israel Chemicals |
| Harel Insurance vs. Elbit Systems | Harel Insurance vs. Discount Investment Corp | Harel Insurance vs. AudioCodes | Harel Insurance vs. Shufersal |
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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