Correlation Between Amanet Management and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Amanet Management and Bank Leumi 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 Amanet Management and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amanet Management Systems and Bank Leumi Le Israel, you can compare the effects of market volatilities on Amanet Management and Bank Leumi 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 Amanet Management with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amanet Management and Bank Leumi.
Diversification Opportunities for Amanet Management and Bank Leumi
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amanet and Bank is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Amanet Management Systems and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le and Amanet Management 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 Amanet Management Systems are associated (or correlated) with Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Amanet Management i.e., Amanet Management and Bank Leumi go up and down completely randomly.
Pair Corralation between Amanet Management and Bank Leumi
Assuming the 90 days trading horizon Amanet Management Systems is expected to generate 0.94 times more return on investment than Bank Leumi. However, Amanet Management Systems is 1.06 times less risky than Bank Leumi. It trades about 0.05 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about -0.15 per unit of risk. If you would invest 170,000 in Amanet Management Systems on January 26, 2024 and sell it today you would earn a total of 2,300 from holding Amanet Management Systems or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amanet Management Systems vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Amanet Management Systems |
| Bank Leumi Le |
Amanet Management and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amanet Management and Bank Leumi
The main advantage of trading using opposite Amanet Management and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amanet Management position performs unexpectedly, Bank Leumi 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 Bank Leumi will offset losses from the drop in Bank Leumi's long position.| Amanet Management vs. Alony Hetz Properties | Amanet Management vs. Melisron | Amanet Management vs. Shufersal | Amanet Management vs. Israel Discount Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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