Correlation Between Bank Hapoalim and Isracard

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

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

Diversification Opportunities for Bank Hapoalim and Isracard

0.52

Correlation Coefficient

Bank Hapoalim  Isracard

Very weak diversification

The 3 months correlation between Bank and Isracard is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank Hapoalim and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard and Bank Hapoalim 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 Hapoalim are associated (or correlated) with Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Bank Hapoalim i.e., Bank Hapoalim and Isracard go up and down completely randomly.

Pair Corralation between Bank Hapoalim and Isracard

Assuming the 90 days trading horizon Bank Hapoalim is expected to generate 1.42 times less return on investment than Isracard. But when comparing it to its historical volatility, Bank Hapoalim is 1.17 times less risky than Isracard. It trades about 0.23 of its potential returns per unit of risk. Isracard is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  172,300  in Isracard on April 24, 2025 and sell it today you would earn a total of  50,900  from holding Isracard or generate 29.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.96%
Values	Daily Returns

Bank Hapoalim  vs.  Isracard

Bank Hapoalim

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Hapoalim are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bank Hapoalim sustained solid returns over the last few months and may actually be approaching a breakup point.

Isracard

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Isracard are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isracard sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Hapoalim and Isracard

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

The idea behind Bank Hapoalim and Isracard 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.