Correlation Between Migdal Insurance and Avrot Industries
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Avrot 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 Avrot 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 Avrot Industries, you can compare the effects of market volatilities on Migdal Insurance and Avrot 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 Avrot Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Avrot Industries.
Diversification Opportunities for Migdal Insurance and Avrot Industries
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Migdal and Avrot is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Avrot Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avrot Industries 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 Avrot Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avrot Industries has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Avrot Industries go up and down completely randomly.
Pair Corralation between Migdal Insurance and Avrot Industries
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 2.05 times more return on investment than Avrot Industries. However, Migdal Insurance is 2.05 times more volatile than Avrot Industries. It trades about 0.34 of its potential returns per unit of risk. Avrot Industries is currently generating about -0.24 per unit of risk. If you would invest 57,750 in Migdal Insurance on August 27, 2024 and sell it today you would earn a total of 5,390 from holding Migdal Insurance or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Avrot Industries
Performance |
| Timeline |
| Migdal Insurance |
| Avrot Industries |
Migdal Insurance and Avrot Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Avrot Industries
The main advantage of trading using opposite Migdal Insurance and Avrot Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Avrot 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 Avrot Industries will offset losses from the drop in Avrot 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 |
| Avrot Industries vs. Veridis Environment | Avrot Industries vs. Hiron Trade Investments Industrial | Avrot Industries vs. ICL Israel Chemicals | Avrot Industries vs. Imed Infinity Medical Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |