Correlation Between GFC Green and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both GFC Green 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 GFC Green and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFC Green Fields and Migdal Insurance, you can compare the effects of market volatilities on GFC Green 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 GFC Green with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFC Green and Migdal Insurance.
Diversification Opportunities for GFC Green and Migdal Insurance
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GFC and Migdal is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GFC Green Fields and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and GFC Green 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 GFC Green Fields 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 GFC Green i.e., GFC Green and Migdal Insurance go up and down completely randomly.
Pair Corralation between GFC Green and Migdal Insurance
Assuming the 90 days trading horizon GFC Green is expected to generate 1.48 times less return on investment than Migdal Insurance. In addition to that, GFC Green is 1.03 times more volatile than Migdal Insurance. It trades about 0.04 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.06 per unit of volatility. If you would invest 44,843 in Migdal Insurance on September 3, 2024 and sell it today you would earn a total of 22,757 from holding Migdal Insurance or generate 50.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
GFC Green Fields vs. Migdal Insurance
Performance |
| Timeline |
| GFC Green Fields |
| Migdal Insurance |
GFC Green and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFC Green and Migdal Insurance
The main advantage of trading using opposite GFC Green and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFC Green 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.| GFC Green vs. Bezeq Israeli Telecommunication | GFC Green vs. El Al Israel | GFC Green vs. Bank Leumi Le Israel | GFC Green vs. Elbit Systems |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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