Correlation Between Migdal Insurance and GIVOT OLAM
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and GIVOT OLAM 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 GIVOT OLAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and GIVOT OLAM OIL, you can compare the effects of market volatilities on Migdal Insurance and GIVOT OLAM 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 GIVOT OLAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and GIVOT OLAM.
Diversification Opportunities for Migdal Insurance and GIVOT OLAM
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Migdal and GIVOT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and GIVOT OLAM OIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIVOT OLAM OIL 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 GIVOT OLAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIVOT OLAM OIL has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and GIVOT OLAM go up and down completely randomly.
Pair Corralation between Migdal Insurance and GIVOT OLAM
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.41 times more return on investment than GIVOT OLAM. However, Migdal Insurance is 2.47 times less risky than GIVOT OLAM. It trades about 0.14 of its potential returns per unit of risk. GIVOT OLAM OIL is currently generating about 0.04 per unit of risk. If you would invest 72,280 in Migdal Insurance on November 29, 2024 and sell it today you would earn a total of 2,720 from holding Migdal Insurance or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Migdal Insurance vs. GIVOT OLAM OIL
Performance |
| Timeline |
| Migdal Insurance |
| GIVOT OLAM OIL |
Migdal Insurance and GIVOT OLAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and GIVOT OLAM
The main advantage of trading using opposite Migdal Insurance and GIVOT OLAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, GIVOT OLAM 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 GIVOT OLAM will offset losses from the drop in GIVOT OLAM'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 |
| GIVOT OLAM vs. Suny Cellular Communication | GIVOT OLAM vs. Mobile Max M | GIVOT OLAM vs. Electreon Wireless | GIVOT OLAM vs. Terminal X Online |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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