Correlation Between Lachish and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Lachish 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 Lachish and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lachish and Migdal Insurance, you can compare the effects of market volatilities on Lachish 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 Lachish with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lachish and Migdal Insurance.
Diversification Opportunities for Lachish and Migdal Insurance
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lachish and Migdal is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lachish and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Lachish 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 Lachish 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 Lachish i.e., Lachish and Migdal Insurance go up and down completely randomly.
Pair Corralation between Lachish and Migdal Insurance
Assuming the 90 days trading horizon Lachish is expected to generate 6.44 times less return on investment than Migdal Insurance. In addition to that, Lachish is 1.93 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 0.49 per unit of volatility. If you would invest 66,880 in Migdal Insurance on October 21, 2024 and sell it today you would earn a total of 6,450 from holding Migdal Insurance or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lachish vs. Migdal Insurance
Performance |
| Timeline |
| Lachish |
| Migdal Insurance |
Lachish and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lachish and Migdal Insurance
The main advantage of trading using opposite Lachish and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lachish 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.| Lachish vs. Ilex Medical | Lachish vs. TAT Technologies | Lachish vs. Clal Insurance Enterprises | Lachish vs. Abra Information Technologies |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |