Correlation Between Migdal Insurance and Avgol Industries
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Avgol Industries 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 Avgol Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Avgol Industries 1953, you can compare the effects of market volatilities on Migdal Insurance and Avgol Industries 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 Avgol Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Avgol Industries.
Diversification Opportunities for Migdal Insurance and Avgol Industries
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Migdal and Avgol is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Avgol Industries 1953 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avgol Industries 1953 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 Avgol Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avgol Industries 1953 has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Avgol Industries go up and down completely randomly.
Pair Corralation between Migdal Insurance and Avgol Industries
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.68 times more return on investment than Avgol Industries. However, Migdal Insurance is 1.48 times less risky than Avgol Industries. It trades about 0.41 of its potential returns per unit of risk. Avgol Industries 1953 is currently generating about 0.11 per unit of risk. If you would invest 46,640 in Migdal Insurance on August 28, 2024 and sell it today you would earn a total of 17,110 from holding Migdal Insurance or generate 36.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Avgol Industries 1953
Performance |
| Timeline |
| Migdal Insurance |
| Avgol Industries 1953 |
Migdal Insurance and Avgol Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Avgol Industries
The main advantage of trading using opposite Migdal Insurance and Avgol Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Avgol Industries 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 Avgol Industries will offset losses from the drop in Avgol Industries' 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 |
| Avgol Industries vs. Alony Hetz Properties | Avgol Industries vs. Discount Investment Corp | Avgol Industries vs. Migdal Insurance | Avgol Industries vs. Bezeq Israeli Telecommunication |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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