Correlation Between Bram Indus and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Bram Indus 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 Bram Indus and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bram Indus and Bank Leumi Le Israel, you can compare the effects of market volatilities on Bram Indus 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 Bram Indus with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bram Indus and Bank Leumi.
Diversification Opportunities for Bram Indus and Bank Leumi
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bram and Bank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bram Indus 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 Bram Indus 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 Bram Indus 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 Bram Indus i.e., Bram Indus and Bank Leumi go up and down completely randomly.
Pair Corralation between Bram Indus and Bank Leumi
Assuming the 90 days trading horizon Bram Indus is expected to generate 0.49 times more return on investment than Bank Leumi. However, Bram Indus is 2.04 times less risky than Bank Leumi. It trades about -0.24 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about -0.13 per unit of risk. If you would invest 15,850 in Bram Indus on January 25, 2024 and sell it today you would lose (770.00) from holding Bram Indus or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bram Indus vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Bram Indus |
| Bank Leumi Le |
Bram Indus and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bram Indus and Bank Leumi
The main advantage of trading using opposite Bram Indus and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bram Indus 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.| Bram Indus vs. Neto ME Holdings | Bram Indus vs. Aryt Industries | Bram Indus vs. Kerur Holdings | Bram Indus vs. Globrands Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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