Correlation Between Tel Aviv and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Tel Aviv 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 Tel Aviv and Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Harel Insurance Investments, you can compare the effects of market volatilities on Tel Aviv 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 Tel Aviv with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Harel Insurance.
Diversification Opportunities for Tel Aviv and Harel Insurance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Harel is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 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 Tel Aviv 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 Tel Aviv 35 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 Tel Aviv i.e., Tel Aviv and Harel Insurance go up and down completely randomly.
Pair Corralation between Tel Aviv and Harel Insurance
Assuming the 90 days trading horizon Tel Aviv is expected to generate 1.86 times less return on investment than Harel Insurance. But when comparing it to its historical volatility, Tel Aviv 35 is 2.17 times less risky than Harel Insurance. It trades about 0.05 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 314,574 in Harel Insurance Investments on August 24, 2024 and sell it today you would earn a total of 105,426 from holding Harel Insurance Investments or generate 33.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Harel Insurance Investments
Performance |
| Timeline |
Tel Aviv and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Harel Insurance Investments
Pair trading matchups for Harel Insurance
Pair Trading with Tel Aviv and Harel Insurance
The main advantage of trading using opposite Tel Aviv and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv 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.| Tel Aviv vs. Technoplus Ventures | Tel Aviv vs. Silver Castle Holdings | Tel Aviv vs. Rapac Communication Infrastructure | Tel Aviv vs. Unicorn Technologies |
| Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Mizrahi Tefahot | Harel Insurance 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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