Correlation Between Tachlit Indices and Harel Index

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Can any of the company-specific risk be diversified away by investing in both Tachlit Indices and Harel Index 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 Tachlit Indices and Harel Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tachlit Indices Mutual and Harel Index Funds, you can compare the effects of market volatilities on Tachlit Indices and Harel Index 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 Tachlit Indices with a short position of Harel Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tachlit Indices and Harel Index.

Diversification Opportunities for Tachlit Indices and Harel Index

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Tachlit and Harel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tachlit Indices Mutual and Harel Index Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Index Funds and Tachlit Indices 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 Tachlit Indices Mutual are associated (or correlated) with Harel Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Index Funds has no effect on the direction of Tachlit Indices i.e., Tachlit Indices and Harel Index go up and down completely randomly.

Pair Corralation between Tachlit Indices and Harel Index

Assuming the 90 days trading horizon Tachlit Indices Mutual is expected to under-perform the Harel Index. In addition to that, Tachlit Indices is 2.11 times more volatile than Harel Index Funds. It trades about -0.05 of its total potential returns per unit of risk. Harel Index Funds is currently generating about 0.09 per unit of volatility. If you would invest  172,600  in Harel Index Funds on September 12, 2024 and sell it today you would earn a total of  67,100  from holding Harel Index Funds or generate 38.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.74%
ValuesDaily Returns

Tachlit Indices Mutual  vs.  Harel Index Funds

 Performance 
       Timeline  
Tachlit Indices Mutual 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Tachlit Indices Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.
Harel Index Funds 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Harel Index Funds has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Tachlit Indices and Harel Index Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tachlit Indices and Harel Index

The main advantage of trading using opposite Tachlit Indices and Harel Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tachlit Indices position performs unexpectedly, Harel Index 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 Index will offset losses from the drop in Harel Index's long position.
The idea behind Tachlit Indices Mutual and Harel Index Funds 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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