Correlation Between Migdal Insurance and Azrieli
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Azrieli 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 Azrieli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Azrieli Group, you can compare the effects of market volatilities on Migdal Insurance and Azrieli 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 Azrieli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Azrieli.
Diversification Opportunities for Migdal Insurance and Azrieli
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Migdal and Azrieli is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Azrieli Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azrieli Group 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 Azrieli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azrieli Group has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Azrieli go up and down completely randomly.
Pair Corralation between Migdal Insurance and Azrieli
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.52 times more return on investment than Azrieli. However, Migdal Insurance is 1.92 times less risky than Azrieli. It trades about -0.11 of its potential returns per unit of risk. Azrieli Group is currently generating about -0.21 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Azrieli Group
Performance |
| Timeline |
| Migdal Insurance |
| Azrieli Group |
Migdal Insurance and Azrieli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Azrieli
The main advantage of trading using opposite Migdal Insurance and Azrieli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Azrieli 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 Azrieli will offset losses from the drop in Azrieli'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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