Correlation Between Harel Insurance and Tadir Gan
Can any of the company-specific risk be diversified away by investing in both Harel Insurance and Tadir Gan 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 Tadir Gan 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 Tadir Gan 1993, you can compare the effects of market volatilities on Harel Insurance and Tadir Gan 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 Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Tadir Gan.
Diversification Opportunities for Harel Insurance and Tadir Gan
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Harel and Tadir is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Tadir Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir Gan 1993 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 Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir Gan 1993 has no effect on the direction of Harel Insurance i.e., Harel Insurance and Tadir Gan go up and down completely randomly.
Pair Corralation between Harel Insurance and Tadir Gan
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.49 times more return on investment than Tadir Gan. However, Harel Insurance Investments is 2.05 times less risky than Tadir Gan. It trades about 0.48 of its potential returns per unit of risk. Tadir Gan 1993 is currently generating about 0.02 per unit of risk. If you would invest 337,612 in Harel Insurance Investments on September 14, 2024 and sell it today you would earn a total of 169,588 from holding Harel Insurance Investments or generate 50.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.87% |
Values | Daily Returns |
Harel Insurance Investments vs. Tadir Gan 1993
Performance |
Timeline |
Harel Insurance Inve |
Tadir Gan 1993 |
Harel Insurance and Tadir Gan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harel Insurance and Tadir Gan
The main advantage of trading using opposite Harel Insurance and Tadir Gan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance position performs unexpectedly, Tadir Gan 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 Tadir Gan will offset losses from the drop in Tadir Gan's long position.Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Israel Discount Bank | Harel Insurance vs. Mizrahi Tefahot | Harel Insurance vs. Bezeq Israeli Telecommunication |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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