Correlation Between Teuza A and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Teuza A 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 Teuza A and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teuza A Fairchild and Bank Hapoalim, you can compare the effects of market volatilities on Teuza A 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 Teuza A with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teuza A and Bank Hapoalim.
Diversification Opportunities for Teuza A and Bank Hapoalim
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Teuza and Bank is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Teuza A Fairchild and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and Teuza A 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 Teuza A Fairchild 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 Teuza A i.e., Teuza A and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Teuza A and Bank Hapoalim
Assuming the 90 days trading horizon Teuza A Fairchild is expected to under-perform the Bank Hapoalim. In addition to that, Teuza A is 1.94 times more volatile than Bank Hapoalim. It trades about -0.01 of its total potential returns per unit of risk. Bank Hapoalim is currently generating about 0.06 per unit of volatility. If you would invest 284,484 in Bank Hapoalim on September 4, 2024 and sell it today you would earn a total of 132,216 from holding Bank Hapoalim or generate 46.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Teuza A Fairchild vs. Bank Hapoalim
Performance |
| Timeline |
| Teuza A Fairchild |
| Bank Hapoalim |
Teuza A and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teuza A and Bank Hapoalim
The main advantage of trading using opposite Teuza A and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teuza A 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.| Teuza A vs. Bank Hapoalim | Teuza A vs. Israel Discount Bank | Teuza A vs. First International Bank | Teuza A vs. Elbit Systems |
| Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. First International Bank | Bank Hapoalim 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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