Correlation Between Migdal Insurance and Airport City
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Airport City 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 Airport City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Airport City, you can compare the effects of market volatilities on Migdal Insurance and Airport City 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 Airport City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Airport City.
Diversification Opportunities for Migdal Insurance and Airport City
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Migdal and Airport is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Airport City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airport City 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 Airport City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airport City has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Airport City go up and down completely randomly.
Pair Corralation between Migdal Insurance and Airport City
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.33 times less return on investment than Airport City. In addition to that, Migdal Insurance is 1.36 times more volatile than Airport City. It trades about 0.23 of its total potential returns per unit of risk. Airport City is currently generating about 0.41 per unit of volatility. If you would invest 557,000 in Airport City on September 3, 2024 and sell it today you would earn a total of 47,000 from holding Airport City or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Airport City
Performance |
| Timeline |
| Migdal Insurance |
| Airport City |
Migdal Insurance and Airport City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Airport City
The main advantage of trading using opposite Migdal Insurance and Airport City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Airport City 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 Airport City will offset losses from the drop in Airport City's long position.| Migdal Insurance vs. Harel Insurance Investments | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Bank Leumi Le Israel |
| Airport City vs. Melisron | Airport City vs. Alony Hetz Properties | Airport City vs. Amot Investments | Airport City vs. Azrieli Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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