Correlation Between Teva Pharmaceutical and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Teva Pharmaceutical 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 Teva Pharmaceutical and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharmaceutical Industries and Bank Leumi Le Israel, you can compare the effects of market volatilities on Teva Pharmaceutical 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 Teva Pharmaceutical with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharmaceutical and Bank Leumi.
Diversification Opportunities for Teva Pharmaceutical and Bank Leumi
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Teva and Bank is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharmaceutical Industries 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 Teva Pharmaceutical 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 Teva Pharmaceutical Industries 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 Teva Pharmaceutical i.e., Teva Pharmaceutical and Bank Leumi go up and down completely randomly.
Pair Corralation between Teva Pharmaceutical and Bank Leumi
Assuming the 90 days trading horizon Teva Pharmaceutical Industries is expected to under-perform the Bank Leumi. In addition to that, Teva Pharmaceutical is 1.67 times more volatile than Bank Leumi Le Israel. It trades about -0.24 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.64 per unit of volatility. If you would invest 371,500 in Bank Leumi Le Israel on August 27, 2024 and sell it today you would earn a total of 42,000 from holding Bank Leumi Le Israel or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teva Pharmaceutical Industries vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Teva Pharmaceutical |
| Bank Leumi Le |
Teva Pharmaceutical and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharmaceutical and Bank Leumi
The main advantage of trading using opposite Teva Pharmaceutical and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharmaceutical 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.| Teva Pharmaceutical vs. Bezeq Israeli Telecommunication | Teva Pharmaceutical vs. El Al Israel | Teva Pharmaceutical vs. Bank Leumi Le Israel | Teva Pharmaceutical vs. Elbit Systems |
| Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Israel Discount Bank | Bank Leumi vs. Bezeq Israeli Telecommunication | Bank Leumi vs. Elbit Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |