Correlation Between Altshuler Shaham and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Altshuler Shaham and Migdal Insurance 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 Altshuler Shaham and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altshuler Shaham Financial and Migdal Insurance, you can compare the effects of market volatilities on Altshuler Shaham and Migdal Insurance 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 Altshuler Shaham with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altshuler Shaham and Migdal Insurance.
Diversification Opportunities for Altshuler Shaham and Migdal Insurance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Altshuler and Migdal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Altshuler Shaham Financial and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Altshuler Shaham 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 Altshuler Shaham Financial are associated (or correlated) with Migdal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migdal Insurance has no effect on the direction of Altshuler Shaham i.e., Altshuler Shaham and Migdal Insurance go up and down completely randomly.
Pair Corralation between Altshuler Shaham and Migdal Insurance
Assuming the 90 days trading horizon Altshuler Shaham is expected to generate 1.22 times less return on investment than Migdal Insurance. In addition to that, Altshuler Shaham is 1.13 times more volatile than Migdal Insurance. It trades about 0.08 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.12 per unit of volatility. If you would invest 41,930 in Migdal Insurance on August 26, 2024 and sell it today you would earn a total of 21,210 from holding Migdal Insurance or generate 50.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altshuler Shaham Financial vs. Migdal Insurance
Performance |
| Timeline |
| Altshuler Shaham Fin |
| Migdal Insurance |
Altshuler Shaham and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altshuler Shaham and Migdal Insurance
The main advantage of trading using opposite Altshuler Shaham and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altshuler Shaham position performs unexpectedly, Migdal Insurance 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 Migdal Insurance will offset losses from the drop in Migdal Insurance's long position.| Altshuler Shaham vs. Generation Capital | Altshuler Shaham vs. Meitav Dash Investments | Altshuler Shaham vs. IBI Inv House | Altshuler Shaham vs. Mivtach Shamir |
| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Bezeq Israeli Telecommunication | Migdal Insurance 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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