Correlation Between Twin Ridge and Bank Leumi

Can any of the company-specific risk be diversified away by investing in both Twin Ridge and Bank Leumi 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 Twin Ridge and Bank Leumi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Twin Ridge Capital and Bank Leumi Le , you can compare the effects of market volatilities on Twin Ridge and Bank Leumi 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 Twin Ridge with a short position of Bank Leumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twin Ridge and Bank Leumi.

Diversification Opportunities for Twin Ridge and Bank Leumi

0.9

Correlation Coefficient

Twin Ridge  Bank Leumi

Almost no diversification

The 3 months correlation between Twin and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Twin Ridge Capital and Bank Leumi Le in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le and Twin Ridge 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 Twin Ridge Capital are associated (or correlated) with Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Twin Ridge i.e., Twin Ridge and Bank Leumi go up and down completely randomly.

Pair Corralation between Twin Ridge and Bank Leumi

If you would invest  795.00  in Bank Leumi Le on September 5, 2024 and sell it today you would earn a total of  105.00  from holding Bank Leumi Le or generate 13.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	2.13%
Values	Daily Returns

Twin Ridge Capital  vs.  Bank Leumi Le

Twin Ridge Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twin Ridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Twin Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bank Leumi Le

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Leumi Le has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Bank Leumi is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Twin Ridge and Bank Leumi

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

The idea behind Twin Ridge Capital and Bank Leumi Le 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.