Correlation Between Israel Discount and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Israel Discount 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 Israel Discount and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Bank Leumi Le Israel, you can compare the effects of market volatilities on Israel Discount 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 Israel Discount with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Bank Leumi.
Diversification Opportunities for Israel Discount and Bank Leumi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Bank is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank 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 Israel Discount 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 Israel Discount Bank 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 Israel Discount i.e., Israel Discount and Bank Leumi go up and down completely randomly.
Pair Corralation between Israel Discount and Bank Leumi
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 1.03 times more return on investment than Bank Leumi. However, Israel Discount is 1.03 times more volatile than Bank Leumi Le Israel. It trades about 0.0 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about -0.11 per unit of risk. If you would invest 184,821 in Israel Discount Bank on January 20, 2024 and sell it today you would lose (1,321) from holding Israel Discount Bank or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Israel Discount Bank |
| Bank Leumi Le |
Israel Discount and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Bank Leumi
The main advantage of trading using opposite Israel Discount and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount 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.| Israel Discount vs. Rani Zim Shopping | Israel Discount vs. Accel Solutions Group | Israel Discount vs. Rapac Communication Infrastructure |
| Bank Leumi vs. Rani Zim Shopping | Bank Leumi vs. Accel Solutions Group | Bank Leumi vs. Rapac Communication Infrastructure |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings 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 | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |