Correlation Between Harel Insurance and Menora Miv

Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Menora Miv 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 Harel Insurance and Menora Miv into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harel Insurance Investments and Menora Miv Hld, you can compare the effects of market volatilities on Harel Insurance and Menora Miv 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 Harel Insurance with a short position of Menora Miv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Menora Miv.

Diversification Opportunities for Harel Insurance and Menora Miv

0.95

Correlation Coefficient

Harel Insurance  Menora Miv

Almost no diversification

The 3 months correlation between Harel and Menora is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Menora Miv Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Miv Hld and Harel Insurance 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 Harel Insurance Investments are associated (or correlated) with Menora Miv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Miv Hld has no effect on the direction of Harel Insurance i.e., Harel Insurance and Menora Miv go up and down completely randomly.

Pair Corralation between Harel Insurance and Menora Miv

Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 1.21 times more return on investment than Menora Miv. However, Harel Insurance is 1.21 times more volatile than Menora Miv Hld. It trades about 0.37 of its potential returns per unit of risk. Menora Miv Hld is currently generating about 0.28 per unit of risk. If you would invest  421,540  in Harel Insurance Investments on November 29, 2024 and sell it today you would earn a total of  175,760  from holding Harel Insurance Investments or generate 41.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Harel Insurance Investments  vs.  Menora Miv Hld

Harel Insurance Inve

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Insurance Investments are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harel Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Menora Miv Hld

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Menora Miv Hld are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Menora Miv sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harel Insurance and Menora Miv

The main advantage of trading using opposite Harel Insurance and Menora Miv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Menora Miv 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 Menora Miv will offset losses from the drop in Menora Miv's long position.

The idea behind Harel Insurance Investments and Menora Miv Hld 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.