Correlation Between Migdal Insurance and Global Knafaim
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Global Knafaim 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 Global Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Global Knafaim Leasing, you can compare the effects of market volatilities on Migdal Insurance and Global Knafaim 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 Global Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Global Knafaim.
Diversification Opportunities for Migdal Insurance and Global Knafaim
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Migdal and Global is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Global Knafaim Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Knafaim Leasing 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 Global Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Knafaim Leasing has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Global Knafaim go up and down completely randomly.
Pair Corralation between Migdal Insurance and Global Knafaim
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.83 times more return on investment than Global Knafaim. However, Migdal Insurance is 1.2 times less risky than Global Knafaim. It trades about 0.38 of its potential returns per unit of risk. Global Knafaim Leasing is currently generating about -0.17 per unit of risk. If you would invest 57,750 in Migdal Insurance on August 29, 2024 and sell it today you would earn a total of 6,350 from holding Migdal Insurance or generate 11.0% 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. Global Knafaim Leasing
Performance |
| Timeline |
| Migdal Insurance |
| Global Knafaim Leasing |
Migdal Insurance and Global Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Global Knafaim
The main advantage of trading using opposite Migdal Insurance and Global Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Global Knafaim 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 Global Knafaim will offset losses from the drop in Global Knafaim'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 |
| Global Knafaim vs. Arad | Global Knafaim vs. Alony Hetz Properties | Global Knafaim vs. Danel | Global Knafaim vs. Airport City |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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