Correlation Between Amot Investments and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Amot Investments 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 Amot Investments and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amot Investments and Migdal Insurance, you can compare the effects of market volatilities on Amot Investments 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 Amot Investments with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amot Investments and Migdal Insurance.
Diversification Opportunities for Amot Investments and Migdal Insurance
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amot and Migdal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amot Investments and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Amot Investments 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 Amot Investments 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 Amot Investments i.e., Amot Investments and Migdal Insurance go up and down completely randomly.
Pair Corralation between Amot Investments and Migdal Insurance
Assuming the 90 days trading horizon Amot Investments is expected to under-perform the Migdal Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Amot Investments is 1.22 times less risky than Migdal Insurance. The stock trades about -0.73 of its potential returns per unit of risk. The Migdal Insurance is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 77,350 in Migdal Insurance on December 8, 2024 and sell it today you would lose (2,050) from holding Migdal Insurance or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amot Investments vs. Migdal Insurance
Performance |
| Timeline |
| Amot Investments |
| Migdal Insurance |
Amot Investments and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amot Investments and Migdal Insurance
The main advantage of trading using opposite Amot Investments and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amot Investments 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.| Amot Investments vs. Alony Hetz Properties | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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