Correlation Between Bank Hapoalim and IGATE Corp

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Can any of the company-specific risk be diversified away by investing in both Bank Hapoalim and IGATE Corp 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 IGATE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Hapoalim and IGATE Corp, you can compare the effects of market volatilities on Bank Hapoalim and IGATE Corp 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 IGATE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Hapoalim and IGATE Corp.

Diversification Opportunities for Bank Hapoalim and IGATE Corp

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bank and IGATE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and IGATE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGATE Corp 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 IGATE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGATE Corp has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and IGATE Corp go up and down completely randomly.

Pair Corralation between Bank Hapoalim and IGATE Corp

If you would invest  331,825  in Bank Hapoalim on December 29, 2023 and sell it today you would earn a total of  11,175  from holding Bank Hapoalim or generate 3.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.56%
ValuesDaily Returns

Bank Hapoalim  vs.  IGATE Corp

 Performance 
       Timeline  
Bank Hapoalim 

Risk-Adjusted Performance

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Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Hapoalim are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bank Hapoalim is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
IGATE Corp 

Risk-Adjusted Performance

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Low
 
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Very Weak
Over the last 90 days IGATE Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IGATE Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bank Hapoalim and IGATE Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Hapoalim and IGATE Corp

The main advantage of trading using opposite Bank Hapoalim and IGATE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Hapoalim position performs unexpectedly, IGATE Corp 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 IGATE Corp will offset losses from the drop in IGATE Corp's long position.
The idea behind Bank Hapoalim and IGATE Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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