Correlation Between Harel Index and Tachlit Indices

Can any of the company-specific risk be diversified away by investing in both Harel Index and Tachlit Indices 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 Harel Index and Tachlit Indices into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harel Index Funds and Tachlit Indices Mutual, you can compare the effects of market volatilities on Harel Index and Tachlit Indices 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 Harel Index with a short position of Tachlit Indices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Index and Tachlit Indices.

Diversification Opportunities for Harel Index and Tachlit Indices

-0.58

Correlation Coefficient

Harel Index  Tachlit Indices

Excellent diversification

The 3 months correlation between Harel and Tachlit is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Harel Index Funds and Tachlit Indices Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachlit Indices Mutual and Harel Index 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 Harel Index Funds are associated (or correlated) with Tachlit Indices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachlit Indices Mutual has no effect on the direction of Harel Index i.e., Harel Index and Tachlit Indices go up and down completely randomly.

Pair Corralation between Harel Index and Tachlit Indices

Assuming the 90 days trading horizon Harel Index Funds is expected to generate 0.44 times more return on investment than Tachlit Indices. However, Harel Index Funds is 2.25 times less risky than Tachlit Indices. It trades about 0.09 of its potential returns per unit of risk. Tachlit Indices Mutual is currently generating about 0.03 per unit of risk. If you would invest  324,100  in Harel Index Funds on February 4, 2024 and sell it today you would earn a total of  3,400  from holding Harel Index Funds or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

Harel Index Funds  vs.  Tachlit Indices Mutual

Harel Index Funds

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Index Funds are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Harel Index may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Tachlit Indices Mutual

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tachlit Indices Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Harel Index and Tachlit Indices

The main advantage of trading using opposite Harel Index and Tachlit Indices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Index position performs unexpectedly, Tachlit Indices 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 Tachlit Indices will offset losses from the drop in Tachlit Indices' long position.

The idea behind Harel Index Funds and Tachlit Indices Mutual 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.