Correlation Between Migdal Insurance and Danel
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Danel 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 Danel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Danel, you can compare the effects of market volatilities on Migdal Insurance and Danel 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 Danel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Danel.
Diversification Opportunities for Migdal Insurance and Danel
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Migdal and Danel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Danel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danel 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 Danel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danel has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Danel go up and down completely randomly.
Pair Corralation between Migdal Insurance and Danel
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.15 times less return on investment than Danel. In addition to that, Migdal Insurance is 1.38 times more volatile than Danel. It trades about 0.22 of its total potential returns per unit of risk. Danel is currently generating about 0.35 per unit of volatility. If you would invest 3,750,000 in Danel on September 1, 2024 and sell it today you would earn a total of 274,000 from holding Danel or generate 7.31% 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. Danel
Performance |
| Timeline |
| Migdal Insurance |
| Danel |
Migdal Insurance and Danel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Danel
The main advantage of trading using opposite Migdal Insurance and Danel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Danel 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 Danel will offset losses from the drop in Danel's long position.| Migdal Insurance vs. Menif Financial Services | Migdal Insurance vs. Accel Solutions Group | Migdal Insurance vs. Rani Zim Shopping | Migdal Insurance vs. Mivtach Shamir |
| Danel vs. Hilan | Danel vs. Fattal 1998 Holdings | Danel vs. Matrix | Danel vs. Bezeq Israeli Telecommunication |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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