Correlation Between Migdal Insurance and Alony Hetz
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Alony Hetz 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 Alony Hetz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Alony Hetz Properties, you can compare the effects of market volatilities on Migdal Insurance and Alony Hetz 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 Alony Hetz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Alony Hetz.
Diversification Opportunities for Migdal Insurance and Alony Hetz
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Migdal and Alony is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Alony Hetz Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alony Hetz Properties 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 Alony Hetz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alony Hetz Properties has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Alony Hetz go up and down completely randomly.
Pair Corralation between Migdal Insurance and Alony Hetz
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.96 times more return on investment than Alony Hetz. However, Migdal Insurance is 1.04 times less risky than Alony Hetz. It trades about -0.11 of its potential returns per unit of risk. Alony Hetz Properties is currently generating about -0.52 per unit of risk. If you would invest 77,350 in Migdal Insurance on December 8, 2024 and sell it today you would lose (2,050) from holding Migdal Insurance or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Alony Hetz Properties
Performance |
| Timeline |
| Migdal Insurance |
| Alony Hetz Properties |
Migdal Insurance and Alony Hetz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Alony Hetz
The main advantage of trading using opposite Migdal Insurance and Alony Hetz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Alony Hetz 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 Alony Hetz will offset losses from the drop in Alony Hetz's long position.| Migdal Insurance vs. Harel Insurance Investments | ||
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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