Correlation Between Hadasit Bio and Bank Leumi

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

Diversification Opportunities for Hadasit Bio and Bank Leumi

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hadasit and Bank is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hadasit Bio 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-Israel and Hadasit Bio 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 Hadasit Bio 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-Israel has no effect on the direction of Hadasit Bio i.e., Hadasit Bio and Bank Leumi go up and down completely randomly.

Pair Corralation between Hadasit Bio and Bank Leumi

Assuming the 90 days trading horizon Hadasit Bio is expected to under-perform the Bank Leumi. In addition to that, Hadasit Bio is 4.32 times more volatile than Bank Leumi Le Israel. It trades about -0.02 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  318,156  in Bank Leumi Le Israel on December 29, 2023 and sell it today you would lose (14,856) from holding Bank Leumi Le Israel or give up 4.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Hadasit Bio  vs.  Bank Leumi Le-Israel

 Performance 
       Timeline  
Hadasit Bio 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Hadasit Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hadasit Bio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Bank Leumi Le-Israel 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Leumi Le Israel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bank Leumi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hadasit Bio and Bank Leumi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hadasit Bio and Bank Leumi

The main advantage of trading using opposite Hadasit Bio and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hadasit Bio 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.
The idea behind Hadasit Bio and Bank Leumi Le Israel 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 CEOs Directory module to screen CEOs from public companies around the world.

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