Correlation Between Israel Land and Bank Leumi
Can any of the company-specific risk be diversified away by investing in both Israel Land 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 Land and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Israel Land and Bank Leumi Le Israel, you can compare the effects of market volatilities on Israel Land 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 Land with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Land and Bank Leumi.
Diversification Opportunities for Israel Land and Bank Leumi
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Israel and Bank is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Israel Land 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 Land 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 The Israel Land 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 Land i.e., Israel Land and Bank Leumi go up and down completely randomly.
Pair Corralation between Israel Land and Bank Leumi
Assuming the 90 days trading horizon The Israel Land is expected to generate 1.42 times more return on investment than Bank Leumi. However, Israel Land is 1.42 times more volatile than Bank Leumi Le Israel. It trades about 0.31 of its potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.05 per unit of risk. If you would invest 53,790 in The Israel Land on January 26, 2024 and sell it today you would earn a total of 23,890 from holding The Israel Land or generate 44.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Israel Land vs. Bank Leumi Le Israel
Performance |
| Timeline |
| Israel Land |
| Bank Leumi Le |
Israel Land and Bank Leumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Land and Bank Leumi
The main advantage of trading using opposite Israel Land and Bank Leumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Land 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 Land vs. Migdal Insurance | Israel Land vs. Amir Marketing and | Israel Land vs. Menif Financial Services | Israel Land vs. Harel Insurance Investments |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |