Correlation Between Shaniv and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Shaniv and Bank Hapoalim 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 Shaniv and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shaniv and Bank Hapoalim, you can compare the effects of market volatilities on Shaniv and Bank Hapoalim 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 Shaniv with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaniv and Bank Hapoalim.
Diversification Opportunities for Shaniv and Bank Hapoalim
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shaniv and Bank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Shaniv and Bank Hapoalim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim and Shaniv 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 Shaniv are associated (or correlated) with Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim has no effect on the direction of Shaniv i.e., Shaniv and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Shaniv and Bank Hapoalim
Assuming the 90 days trading horizon Shaniv is expected to under-perform the Bank Hapoalim. But the stock apears to be less risky and, when comparing its historical volatility, Shaniv is 1.4 times less risky than Bank Hapoalim. The stock trades about -0.42 of its potential returns per unit of risk. The Bank Hapoalim is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 340,000 in Bank Hapoalim on January 25, 2024 and sell it today you would lose (13,800) from holding Bank Hapoalim or give up 4.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaniv vs. Bank Hapoalim
Performance |
| Timeline |
| Shaniv |
| Bank Hapoalim |
Shaniv and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaniv and Bank Hapoalim
The main advantage of trading using opposite Shaniv and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaniv position performs unexpectedly, Bank Hapoalim 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 Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Shaniv vs. Neto ME Holdings | Shaniv vs. Aryt Industries | Shaniv vs. Kerur Holdings | Shaniv vs. Globrands Group |
| Bank Hapoalim vs. Bank Leumi Le Israel | Bank Hapoalim vs. Israel Discount Bank | Bank Hapoalim vs. Mizrahi Tefahot | Bank Hapoalim vs. Bezeq Israeli Telecommunication |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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