Correlation Between Harel Insurance and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Harel Insurance 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 Harel Insurance and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harel Insurance Investments and Migdal Insurance, you can compare the effects of market volatilities on Harel Insurance 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 Harel Insurance with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harel Insurance and Migdal Insurance.
Diversification Opportunities for Harel Insurance and Migdal Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Harel and Migdal is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Harel Insurance 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 Harel Insurance Investments 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 Harel Insurance i.e., Harel Insurance and Migdal Insurance go up and down completely randomly.
Pair Corralation between Harel Insurance and Migdal Insurance
Assuming the 90 days trading horizon Harel Insurance Investments is expected to generate 0.99 times more return on investment than Migdal Insurance. However, Harel Insurance Investments is 1.01 times less risky than Migdal Insurance. It trades about 0.56 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.35 per unit of risk. If you would invest 364,100 in Harel Insurance Investments on August 24, 2024 and sell it today you would earn a total of 55,900 from holding Harel Insurance Investments or generate 15.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harel Insurance Investments vs. Migdal Insurance
Performance |
| Timeline |
| Harel Insurance Inve |
| Migdal Insurance |
Harel Insurance and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harel Insurance and Migdal Insurance
The main advantage of trading using opposite Harel Insurance and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance 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.| Harel Insurance vs. Migdal Insurance | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Bank Leumi Le Israel |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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