Correlation Between Bank Hapoalim and Azrieli

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

By analyzing existing cross correlation between Bank Hapoalim and Azrieli Group, you can compare the effects of market volatilities on Bank Hapoalim and Azrieli 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 Bank Hapoalim with a short position of Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and Azrieli.

Diversification Opportunities for Bank Hapoalim and Azrieli

-0.55

Correlation Coefficient

Bank Hapoalim  Azrieli

Excellent diversification

The 3 months correlation between Bank and Azrieli is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group and Bank Hapoalim 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 Bank Hapoalim are associated (or correlated) with Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Azrieli go up and down completely randomly.

Pair Corralation between Bank Hapoalim and Azrieli

Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 0.8 times more return on investment than Azrieli. However, Bank Hapoalim is 1.25 times less risky than Azrieli. It trades about 0.22 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.15 per unit of risk. If you would invest  426,648  in Bank Hapoalim on December 30, 2024 and sell it today you would earn a total of  75,352  from holding Bank Hapoalim or generate 17.66% return on investment over 90 days.

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

Bank Hapoalim  vs.  Azrieli Group

Bank Hapoalim

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Hapoalim are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bank Hapoalim sustained solid returns over the last few months and may actually be approaching a breakup point.

Azrieli Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Azrieli Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bank Hapoalim and Azrieli

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

The idea behind Bank Hapoalim and Azrieli Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.