Correlation Between Bio View and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Bio View 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 Bio View and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio View and Migdal Insurance, you can compare the effects of market volatilities on Bio View 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 Bio View with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio View and Migdal Insurance.
Diversification Opportunities for Bio View and Migdal Insurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bio and Migdal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bio View and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Bio View 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 Bio View 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 Bio View i.e., Bio View and Migdal Insurance go up and down completely randomly.
Pair Corralation between Bio View and Migdal Insurance
Assuming the 90 days trading horizon Bio View is expected to generate 25.9 times less return on investment than Migdal Insurance. In addition to that, Bio View is 3.17 times more volatile than Migdal Insurance. It trades about 0.01 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.52 per unit of volatility. If you would invest 50,820 in Migdal Insurance on August 29, 2024 and sell it today you would earn a total of 13,280 from holding Migdal Insurance or generate 26.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio View vs. Migdal Insurance
Performance |
| Timeline |
| Bio View |
| Migdal Insurance |
Bio View and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio View and Migdal Insurance
The main advantage of trading using opposite Bio View and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio View 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.| Bio View vs. Migdal Insurance | Bio View vs. Storage Drop Storage | Bio View vs. Iargento Hi Tech | Bio View vs. One Software Technologies |
| Migdal Insurance vs. Elbit Systems | Migdal Insurance vs. Discount Investment Corp | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. AudioCodes |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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