Correlation Between Big Shopping and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Big Shopping 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 Big Shopping and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Shopping Centers and Migdal Insurance, you can compare the effects of market volatilities on Big Shopping 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 Big Shopping with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Shopping and Migdal Insurance.
Diversification Opportunities for Big Shopping and Migdal Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Big and Migdal is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Big Shopping Centers and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Big Shopping 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 Big Shopping Centers 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 Big Shopping i.e., Big Shopping and Migdal Insurance go up and down completely randomly.
Pair Corralation between Big Shopping and Migdal Insurance
Assuming the 90 days trading horizon Big Shopping is expected to generate 1.15 times less return on investment than Migdal Insurance. But when comparing it to its historical volatility, Big Shopping Centers is 1.08 times less risky than Migdal Insurance. It trades about 0.06 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 42,586 in Migdal Insurance on September 1, 2024 and sell it today you would earn a total of 22,104 from holding Migdal Insurance or generate 51.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Shopping Centers vs. Migdal Insurance
Performance |
| Timeline |
| Big Shopping Centers |
| Migdal Insurance |
Big Shopping and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Shopping and Migdal Insurance
The main advantage of trading using opposite Big Shopping and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Shopping 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.| Big Shopping vs. Azrieli Group | Big Shopping vs. Melisron | Big Shopping vs. Amot Investments | Big Shopping vs. Alony Hetz Properties |
| Migdal Insurance vs. Menif Financial Services | Migdal Insurance vs. Accel Solutions Group | Migdal Insurance vs. Rani Zim Shopping | Migdal Insurance vs. Rapac Communication Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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