Correlation Between Migdal Insurance and Bram Indus
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Bram Indus 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 Bram Indus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Bram Indus, you can compare the effects of market volatilities on Migdal Insurance and Bram Indus 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 Bram Indus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Bram Indus.
Diversification Opportunities for Migdal Insurance and Bram Indus
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Migdal and Bram is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Bram Indus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bram Indus 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 Bram Indus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bram Indus has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Bram Indus go up and down completely randomly.
Pair Corralation between Migdal Insurance and Bram Indus
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.61 times more return on investment than Bram Indus. However, Migdal Insurance is 1.64 times less risky than Bram Indus. It trades about 0.44 of its potential returns per unit of risk. Bram Indus is currently generating about -0.13 per unit of risk. If you would invest 66,390 in Migdal Insurance on October 25, 2024 and sell it today you would earn a total of 6,340 from holding Migdal Insurance or generate 9.55% 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. Bram Indus
Performance |
| Timeline |
| Migdal Insurance |
| Bram Indus |
Migdal Insurance and Bram Indus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Bram Indus
The main advantage of trading using opposite Migdal Insurance and Bram Indus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Bram Indus 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 Bram Indus will offset losses from the drop in Bram Indus' 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 |
| Bram Indus vs. Aura Investments | Bram Indus vs. Clal Biotechnology Industries | Bram Indus vs. One Software Technologies | Bram Indus vs. Oron Group Investments |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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