Correlation Between Tel Aviv and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Bank Hapoalim 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 Bank Hapoalim 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 Bank Hapoalim, you can compare the effects of market volatilities on Tel Aviv and Bank Hapoalim 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 Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Bank Hapoalim.
Diversification Opportunities for Tel Aviv and Bank Hapoalim
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Bank is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim 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 Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Tel Aviv i.e., Tel Aviv and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Tel Aviv and Bank Hapoalim
Assuming the 90 days trading horizon Tel Aviv is expected to generate 1.56 times less return on investment than Bank Hapoalim. But when comparing it to its historical volatility, Tel Aviv 35 is 1.59 times less risky than Bank Hapoalim. It trades about 0.09 of its potential returns per unit of risk. Bank Hapoalim is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 293,469 in Bank Hapoalim on August 28, 2024 and sell it today you would earn a total of 131,631 from holding Bank Hapoalim or generate 44.85% 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. Bank Hapoalim
Performance |
| Timeline |
Tel Aviv and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Bank Hapoalim
Pair trading matchups for Bank Hapoalim
Pair Trading with Tel Aviv and Bank Hapoalim
The main advantage of trading using opposite Tel Aviv and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Bank Hapoalim 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 Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Tel Aviv vs. Azorim Investment Development | Tel Aviv vs. Shagrir Group Vehicle | Tel Aviv vs. Sure Tech Investments LP | Tel Aviv vs. Retailors |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |