Correlation Between Highcon Systems and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Highcon Systems 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 Highcon Systems and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highcon Systems and Migdal Insurance, you can compare the effects of market volatilities on Highcon Systems 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 Highcon Systems with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highcon Systems and Migdal Insurance.
Diversification Opportunities for Highcon Systems and Migdal Insurance
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Highcon and Migdal is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Highcon Systems and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Highcon Systems 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 Highcon Systems 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 Highcon Systems i.e., Highcon Systems and Migdal Insurance go up and down completely randomly.
Pair Corralation between Highcon Systems and Migdal Insurance
Assuming the 90 days trading horizon Highcon Systems is expected to generate 2.75 times more return on investment than Migdal Insurance. However, Highcon Systems is 2.75 times more volatile than Migdal Insurance. It trades about 0.13 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.3 per unit of risk. If you would invest 8,510 in Highcon Systems on September 13, 2024 and sell it today you would earn a total of 880.00 from holding Highcon Systems or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highcon Systems vs. Migdal Insurance
Performance |
| Timeline |
| Highcon Systems |
| Migdal Insurance |
Highcon Systems and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highcon Systems and Migdal Insurance
The main advantage of trading using opposite Highcon Systems and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highcon Systems 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.| Highcon Systems vs. Bezeq Israeli Telecommunication | Highcon Systems vs. Clal Insurance Enterprises | Highcon Systems vs. Opko Health | Highcon Systems vs. Veridis Environment |
| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication |
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.
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