Correlation Between Migdal Insurance and Dan Hotels
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Dan Hotels 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 Dan Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Dan Hotels, you can compare the effects of market volatilities on Migdal Insurance and Dan Hotels 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 Dan Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Dan Hotels.
Diversification Opportunities for Migdal Insurance and Dan Hotels
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Migdal and Dan is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Dan Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dan Hotels 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 Dan Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dan Hotels has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Dan Hotels go up and down completely randomly.
Pair Corralation between Migdal Insurance and Dan Hotels
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.06 times more return on investment than Dan Hotels. However, Migdal Insurance is 1.06 times more volatile than Dan Hotels. It trades about 0.32 of its potential returns per unit of risk. Dan Hotels is currently generating about -0.1 per unit of risk. If you would invest 58,900 in Migdal Insurance on August 30, 2024 and sell it today you would earn a total of 5,790 from holding Migdal Insurance or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. Dan Hotels
Performance |
| Timeline |
| Migdal Insurance |
| Dan Hotels |
Migdal Insurance and Dan Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Dan Hotels
The main advantage of trading using opposite Migdal Insurance and Dan Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Dan Hotels 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 Dan Hotels will offset losses from the drop in Dan Hotels' long position.| Migdal Insurance vs. Elbit Systems | Migdal Insurance vs. Discount Investment Corp | Migdal Insurance vs. AudioCodes | Migdal Insurance vs. Shufersal |
| Dan Hotels vs. Clal Insurance Enterprises | Dan Hotels vs. Israel Discount Bank | Dan Hotels vs. Bezeq Israeli Telecommunication | Dan Hotels vs. Alony Hetz Properties |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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