Correlation Between Bank Leumi and Kadimastem
Can any of the company-specific risk be diversified away by investing in both Bank Leumi and Kadimastem 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 Bank Leumi and Kadimastem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Leumi Le Israel and Kadimastem, you can compare the effects of market volatilities on Bank Leumi and Kadimastem 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 Bank Leumi with a short position of Kadimastem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Leumi and Kadimastem.
Diversification Opportunities for Bank Leumi and Kadimastem
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Kadimastem is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Leumi Le Israel and Kadimastem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadimastem and Bank Leumi 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 Bank Leumi Le Israel are associated (or correlated) with Kadimastem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadimastem has no effect on the direction of Bank Leumi i.e., Bank Leumi and Kadimastem go up and down completely randomly.
Pair Corralation between Bank Leumi and Kadimastem
Assuming the 90 days trading horizon Bank Leumi is expected to generate 3.03 times less return on investment than Kadimastem. But when comparing it to its historical volatility, Bank Leumi Le Israel is 6.24 times less risky than Kadimastem. It trades about 0.36 of its potential returns per unit of risk. Kadimastem is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 68,000 in Kadimastem on September 23, 2024 and sell it today you would earn a total of 50,900 from holding Kadimastem or generate 74.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Leumi Le Israel vs. Kadimastem
Performance |
Timeline |
Bank Leumi Le |
Kadimastem |
Bank Leumi and Kadimastem Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Leumi and Kadimastem
The main advantage of trading using opposite Bank Leumi and Kadimastem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Leumi position performs unexpectedly, Kadimastem 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 Kadimastem will offset losses from the drop in Kadimastem's long position.Bank Leumi vs. Harel Insurance Investments | Bank Leumi vs. Clal Insurance Enterprises | Bank Leumi vs. Bank Hapoalim | Bank Leumi vs. Menora Miv Hld |
Kadimastem vs. Kamada | Kadimastem vs. Teva Pharmaceutical Industries | Kadimastem vs. Tower Semiconductor | Kadimastem vs. Elbit Systems |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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