Correlation Between Harel Index and Harel Sal

Can any of the company-specific risk be diversified away by investing in both Harel Index and Harel Sal 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 Harel Sal 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 Harel Sal Tel Bond, you can compare the effects of market volatilities on Harel Index and Harel Sal 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 Harel Sal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Index and Harel Sal.

Diversification Opportunities for Harel Index and Harel Sal

0.71

Correlation Coefficient

Harel Index  Harel Sal

Poor diversification

The 3 months correlation between Harel and Harel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Harel Index Funds and Harel Sal Tel Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Sal Tel 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 Harel Sal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Sal Tel has no effect on the direction of Harel Index i.e., Harel Index and Harel Sal go up and down completely randomly.

Pair Corralation between Harel Index and Harel Sal

Assuming the 90 days trading horizon Harel Index is expected to generate 1.99 times less return on investment than Harel Sal. In addition to that, Harel Index is 6.83 times more volatile than Harel Sal Tel Bond. It trades about 0.03 of its total potential returns per unit of risk. Harel Sal Tel Bond is currently generating about 0.37 per unit of volatility. If you would invest  37,010  in Harel Sal Tel Bond on September 15, 2024 and sell it today you would earn a total of  1,101  from holding Harel Sal Tel Bond or generate 2.97% return on investment over 90 days.

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

Harel Index Funds  vs.  Harel Sal Tel Bond

Harel Index Funds

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Index Funds are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harel Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harel Sal Tel

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Sal Tel Bond are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Harel Sal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harel Index and Harel Sal

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

The idea behind Harel Index Funds and Harel Sal Tel Bond 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.