Correlation Between Aviv Arlon and Harel Insurance

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

By analyzing existing cross correlation between Aviv Arlon and Harel Insurance Investments, you can compare the effects of market volatilities on Aviv Arlon and Harel Insurance 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 Aviv Arlon with a short position of Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviv Arlon and Harel Insurance.

Diversification Opportunities for Aviv Arlon and Harel Insurance

0.88

Correlation Coefficient

Aviv Arlon  Harel Insurance

Very poor diversification

The 3 months correlation between Aviv and Harel is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aviv Arlon and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve and Aviv Arlon 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 Aviv Arlon are associated (or correlated) with Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Aviv Arlon i.e., Aviv Arlon and Harel Insurance go up and down completely randomly.

Pair Corralation between Aviv Arlon and Harel Insurance

Assuming the 90 days trading horizon Aviv Arlon is expected to generate 6.86 times more return on investment than Harel Insurance. However, Aviv Arlon is 6.86 times more volatile than Harel Insurance Investments. It trades about 0.3 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.45 per unit of risk. If you would invest  28,890  in Aviv Arlon on September 13, 2024 and sell it today you would earn a total of  81,110  from holding Aviv Arlon or generate 280.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Aviv Arlon  vs.  Harel Insurance Investments

Aviv Arlon

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aviv Arlon are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aviv Arlon sustained solid returns over the last few months and may actually be approaching a breakup point.

Harel Insurance Inve

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Insurance Investments are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harel Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aviv Arlon and Harel Insurance

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

The idea behind Aviv Arlon and Harel Insurance Investments 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.