Correlation Between Discount Investment and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Discount Investment 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 Discount Investment and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discount Investment Corp and Migdal Insurance, you can compare the effects of market volatilities on Discount Investment 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 Discount Investment with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Migdal Insurance.
Diversification Opportunities for Discount Investment and Migdal Insurance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Discount and Migdal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Discount Investment 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 Discount Investment Corp 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 Discount Investment i.e., Discount Investment and Migdal Insurance go up and down completely randomly.
Pair Corralation between Discount Investment and Migdal Insurance
Assuming the 90 days trading horizon Discount Investment Corp is expected to generate 2.35 times more return on investment than Migdal Insurance. However, Discount Investment is 2.35 times more volatile than Migdal Insurance. It trades about 0.31 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.37 per unit of risk. If you would invest 39,450 in Discount Investment Corp on August 28, 2024 and sell it today you would earn a total of 8,250 from holding Discount Investment Corp or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. Migdal Insurance
Performance |
| Timeline |
| Discount Investment Corp |
| Migdal Insurance |
Discount Investment and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and Migdal Insurance
The main advantage of trading using opposite Discount Investment and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment 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.| Discount Investment vs. Arad | Discount Investment vs. Alony Hetz Properties | Discount Investment vs. Danel | Discount Investment vs. Airport City |
| Migdal Insurance vs. Harel Insurance Investments | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Bank Leumi Le Israel |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |