Correlation Between Deutsche Boerse and Bank Hapoalim
Can any of the company-specific risk be diversified away by investing in both Deutsche Boerse and Bank Hapoalim 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 Deutsche Boerse and Bank Hapoalim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Boerse AG and Bank Hapoalim ADR, you can compare the effects of market volatilities on Deutsche Boerse and Bank Hapoalim 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 Deutsche Boerse with a short position of Bank Hapoalim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Boerse and Bank Hapoalim.
Diversification Opportunities for Deutsche Boerse and Bank Hapoalim
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Bank is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Boerse AG and Bank Hapoalim ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Hapoalim ADR and Deutsche Boerse 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 Deutsche Boerse AG are associated (or correlated) with Bank Hapoalim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Hapoalim ADR has no effect on the direction of Deutsche Boerse i.e., Deutsche Boerse and Bank Hapoalim go up and down completely randomly.
Pair Corralation between Deutsche Boerse and Bank Hapoalim
Assuming the 90 days horizon Deutsche Boerse AG is expected to generate 0.41 times more return on investment than Bank Hapoalim. However, Deutsche Boerse AG is 2.46 times less risky than Bank Hapoalim. It trades about 0.07 of its potential returns per unit of risk. Bank Hapoalim ADR is currently generating about -0.12 per unit of risk. If you would invest 2,017 in Deutsche Boerse AG on January 25, 2024 and sell it today you would earn a total of 26.00 from holding Deutsche Boerse AG or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Boerse AG vs. Bank Hapoalim ADR
Performance |
| Timeline |
| Deutsche Boerse AG |
| Bank Hapoalim ADR |
Deutsche Boerse and Bank Hapoalim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Boerse and Bank Hapoalim
The main advantage of trading using opposite Deutsche Boerse and Bank Hapoalim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Boerse position performs unexpectedly, Bank Hapoalim 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 Hapoalim will offset losses from the drop in Bank Hapoalim's long position.| Deutsche Boerse vs. London Stock Exchange | Deutsche Boerse vs. Hong Kong Exchanges | Deutsche Boerse vs. Deutsche Brse AG | Deutsche Boerse vs. Singapore Exchange Limited |
| Bank Hapoalim vs. First Horizon | Bank Hapoalim vs. First Horizon | Bank Hapoalim vs. KB Financial Group | Bank Hapoalim vs. Banco Santander Brasil |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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