Correlation Between Migdal Insurance and Salomon A
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Salomon A 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 Salomon A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Salomon A Angel, you can compare the effects of market volatilities on Migdal Insurance and Salomon A 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 Salomon A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Salomon A.
Diversification Opportunities for Migdal Insurance and Salomon A
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Migdal and Salomon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Salomon A Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salomon A Angel 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 Salomon A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salomon A Angel has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Salomon A go up and down completely randomly.
Pair Corralation between Migdal Insurance and Salomon A
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.83 times more return on investment than Salomon A. However, Migdal Insurance is 1.2 times less risky than Salomon A. It trades about 0.05 of its potential returns per unit of risk. Salomon A Angel is currently generating about 0.01 per unit of risk. If you would invest 44,450 in Migdal Insurance on August 27, 2024 and sell it today you would earn a total of 18,690 from holding Migdal Insurance or generate 42.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Salomon A Angel
Performance |
| Timeline |
| Migdal Insurance |
| Salomon A Angel |
Migdal Insurance and Salomon A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Salomon A
The main advantage of trading using opposite Migdal Insurance and Salomon A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Salomon A 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 Salomon A will offset losses from the drop in Salomon A's long position.| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Bezeq Israeli Telecommunication | Migdal Insurance vs. Elbit Systems |
| Salomon A vs. Zanlakol | Salomon A vs. Gan Shmuel | Salomon A vs. Carmit | Salomon A vs. Sano Brunos Enterprises |
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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