Correlation Between Strauss and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Strauss and Bank Leumi 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 Strauss and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strauss Group and Bank Leumi Le Israel, you can compare the effects of market volatilities on Strauss and Bank Leumi 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 Strauss with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and Bank Leumi.
Diversification Opportunities for Strauss and Bank Leumi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strauss and Bank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le and Strauss 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 Strauss Group are associated (or correlated) with Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Strauss i.e., Strauss and Bank Leumi go up and down completely randomly.
Pair Corralation between Strauss and Bank Leumi
Assuming the 90 days trading horizon Strauss Group is expected to under-perform the Bank Leumi. But the stock apears to be less risky and, when comparing its historical volatility, Strauss Group is 1.01 times less risky than Bank Leumi. The stock trades about -0.04 of its potential returns per unit of risk. The Bank Leumi Le Israel is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 255,006 in Bank Leumi Le Israel on August 25, 2024 and sell it today you would earn a total of 158,494 from holding Bank Leumi Le Israel or generate 62.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strauss Group vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Strauss Group |
| Bank Leumi Le |
Strauss and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strauss and Bank Leumi
The main advantage of trading using opposite Strauss and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strauss position performs unexpectedly, Bank Leumi 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 Bank Leumi will offset losses from the drop in Bank Leumi's long position.The idea behind Strauss Group and Bank Leumi Le Israel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Mizrahi Tefahot | Bank Leumi 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |