Correlation Between Migdal Insurance and Castro
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Castro 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 Castro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Castro, you can compare the effects of market volatilities on Migdal Insurance and Castro 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 Castro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Castro.
Diversification Opportunities for Migdal Insurance and Castro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Migdal and Castro is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Castro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castro 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 Castro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castro has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Castro go up and down completely randomly.
Pair Corralation between Migdal Insurance and Castro
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.8 times more return on investment than Castro. However, Migdal Insurance is 1.25 times less risky than Castro. It trades about 0.29 of its potential returns per unit of risk. Castro is currently generating about 0.15 per unit of risk. If you would invest 42,223 in Migdal Insurance on September 3, 2024 and sell it today you would earn a total of 25,377 from holding Migdal Insurance or generate 60.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Castro
Performance |
| Timeline |
| Migdal Insurance |
| Castro |
Migdal Insurance and Castro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Castro
The main advantage of trading using opposite Migdal Insurance and Castro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Castro 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 Castro will offset losses from the drop in Castro's 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 |
| Castro vs. Fox Wizel | Castro vs. Golf Co Group | Castro vs. Bezeq Israeli Telecommunication | Castro vs. Azrieli Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |