Correlation Between Bezeq Israeli and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli 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 Bezeq Israeli and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bezeq Israeli Telecommunication and Migdal Insurance, you can compare the effects of market volatilities on Bezeq Israeli 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 Bezeq Israeli with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Migdal Insurance.
Diversification Opportunities for Bezeq Israeli and Migdal Insurance
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bezeq and Migdal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Bezeq Israeli 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 Bezeq Israeli Telecommunication 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 Bezeq Israeli i.e., Bezeq Israeli and Migdal Insurance go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Migdal Insurance
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 3.64 times less return on investment than Migdal Insurance. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.34 times less risky than Migdal Insurance. It trades about 0.05 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 37,569 in Migdal Insurance on August 25, 2024 and sell it today you would earn a total of 25,571 from holding Migdal Insurance or generate 68.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Migdal Insurance
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Migdal Insurance |
Bezeq Israeli and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Migdal Insurance
The main advantage of trading using opposite Bezeq Israeli and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli 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.| Bezeq Israeli vs. Bank Leumi Le Israel | Bezeq Israeli vs. Teva Pharmaceutical Industries | Bezeq Israeli vs. Bank Hapoalim | Bezeq Israeli vs. Elbit Systems |
| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |