Correlation Between Brill Shoe and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Brill Shoe 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 Brill Shoe and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brill Shoe Industries and Bank Leumi Le Israel, you can compare the effects of market volatilities on Brill Shoe 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 Brill Shoe with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brill Shoe and Bank Leumi.
Diversification Opportunities for Brill Shoe and Bank Leumi
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brill and Bank is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Brill Shoe Industries 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 Brill Shoe 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 Brill Shoe Industries 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 Brill Shoe i.e., Brill Shoe and Bank Leumi go up and down completely randomly.
Pair Corralation between Brill Shoe and Bank Leumi
Assuming the 90 days trading horizon Brill Shoe Industries is expected to under-perform the Bank Leumi. In addition to that, Brill Shoe is 1.95 times more volatile than Bank Leumi Le Israel. It trades about -0.04 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.0 per unit of volatility. If you would invest 302,582 in Bank Leumi Le Israel on January 26, 2024 and sell it today you would lose (11,682) from holding Bank Leumi Le Israel or give up 3.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brill Shoe Industries vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Brill Shoe Industries |
| Bank Leumi Le |
Brill Shoe and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brill Shoe and Bank Leumi
The main advantage of trading using opposite Brill Shoe and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brill Shoe 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.| Brill Shoe vs. Clal Insurance Enterprises | Brill Shoe vs. Israel Discount Bank | Brill Shoe vs. Bezeq Israeli Telecommunication | Brill Shoe vs. Alony Hetz Properties |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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