Correlation Between Migdal Insurance and Adgar Investments
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Adgar Investments 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 Migdal Insurance and Adgar Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Adgar Investments and, you can compare the effects of market volatilities on Migdal Insurance and Adgar Investments 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 Migdal Insurance with a short position of Adgar Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Adgar Investments.
Diversification Opportunities for Migdal Insurance and Adgar Investments
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Migdal and Adgar is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments and Migdal 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 Migdal Insurance are associated (or correlated) with Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Adgar Investments go up and down completely randomly.
Pair Corralation between Migdal Insurance and Adgar Investments
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.02 times more return on investment than Adgar Investments. However, Migdal Insurance is 1.02 times more volatile than Adgar Investments and. It trades about 0.12 of its potential returns per unit of risk. Adgar Investments and is currently generating about 0.0 per unit of risk. If you would invest 42,800 in Migdal Insurance on August 25, 2024 and sell it today you would earn a total of 20,340 from holding Migdal Insurance or generate 47.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Adgar Investments and
Performance |
| Timeline |
| Migdal Insurance |
| Adgar Investments |
Migdal Insurance and Adgar Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Adgar Investments
The main advantage of trading using opposite Migdal Insurance and Adgar Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Adgar Investments 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 Adgar Investments will offset losses from the drop in Adgar Investments' long position.| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication |
| Adgar Investments vs. Israel Canada | Adgar Investments vs. Azrieli Group | Adgar Investments vs. Delek Group | Adgar Investments vs. Shikun Binui |
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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