Correlation Between Migdal Insurance and Bio View
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Bio View 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 Bio View into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Bio View, you can compare the effects of market volatilities on Migdal Insurance and Bio View 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 Bio View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Bio View.
Diversification Opportunities for Migdal Insurance and Bio View
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Migdal and Bio is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View 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 Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Bio View go up and down completely randomly.
Pair Corralation between Migdal Insurance and Bio View
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.51 times more return on investment than Bio View. However, Migdal Insurance is 1.96 times less risky than Bio View. It trades about 0.16 of its potential returns per unit of risk. Bio View is currently generating about 0.0 per unit of risk. If you would invest 40,065 in Migdal Insurance on August 29, 2024 and sell it today you would earn a total of 24,035 from holding Migdal Insurance or generate 59.99% 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. Bio View
Performance |
| Timeline |
| Migdal Insurance |
| Bio View |
Migdal Insurance and Bio View Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Bio View
The main advantage of trading using opposite Migdal Insurance and Bio View positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Bio View 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 Bio View will offset losses from the drop in Bio View's long position.| Migdal Insurance vs. Elbit Systems | Migdal Insurance vs. Discount Investment Corp | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. AudioCodes |
| Bio View vs. Migdal Insurance | Bio View vs. Storage Drop Storage | Bio View vs. Iargento Hi Tech | Bio View vs. One Software Technologies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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