Correlation Between Tikun Olam and Harel Insurance

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

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

Diversification Opportunities for Tikun Olam and Harel Insurance

0.13

Correlation Coefficient

Tikun Olam  Harel Insurance

Average diversification

The 3 months correlation between Tikun and Harel is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tikun Olam Cannbit 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 Tikun Olam 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 Tikun Olam Cannbit 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 Tikun Olam i.e., Tikun Olam and Harel Insurance go up and down completely randomly.

Pair Corralation between Tikun Olam and Harel Insurance

Assuming the 90 days trading horizon Tikun Olam is expected to generate 9.88 times less return on investment than Harel Insurance. In addition to that, Tikun Olam is 1.72 times more volatile than Harel Insurance Investments. It trades about 0.01 of its total potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.23 per unit of volatility. If you would invest  502,920  in Harel Insurance Investments on December 21, 2024 and sell it today you would earn a total of  129,980  from holding Harel Insurance Investments or generate 25.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Tikun Olam Cannbit  vs.  Harel Insurance Investments

Tikun Olam Cannbit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tikun Olam Cannbit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tikun Olam is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 18 (%) 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 Tikun Olam and Harel Insurance

The main advantage of trading using opposite Tikun Olam and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tikun Olam 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 Tikun Olam Cannbit 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..