Correlation Between Mivtach Shamir and Harel Insurance

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

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

Diversification Opportunities for Mivtach Shamir and Harel Insurance

0.8

Correlation Coefficient

Mivtach Shamir  Harel Insurance

Very poor diversification

The 3 months correlation between Mivtach and Harel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mivtach Shamir and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Mivtach Shamir 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 Mivtach Shamir are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Mivtach Shamir i.e., Mivtach Shamir and Harel Insurance go up and down completely randomly.

Pair Corralation between Mivtach Shamir and Harel Insurance

Assuming the 90 days trading horizon Mivtach Shamir is expected to generate 4.15 times less return on investment than Harel Insurance. In addition to that, Mivtach Shamir is 1.12 times more volatile than Harel Insurance Investments. It trades about 0.07 of its total potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.34 per unit of volatility. If you would invest  332,269  in Harel Insurance Investments on September 1, 2024 and sell it today you would earn a total of  105,731  from holding Harel Insurance Investments or generate 31.82% return on investment over 90 days.

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

Mivtach Shamir  vs.  Harel Insurance Investments

Mivtach Shamir

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mivtach Shamir are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mivtach Shamir may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Harel Insurance Inve

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Insurance Investments are ranked lower than 27 (%) 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.

Pair Trading with Mivtach Shamir and Harel Insurance

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

The idea behind Mivtach Shamir and Harel Insurance Investments 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.