Correlation Between Migdal Insurance and Harel Insurance
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Harel Insurance 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 Harel Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Harel Insurance Investments, you can compare the effects of market volatilities on Migdal Insurance and Harel Insurance 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 Harel Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Harel Insurance.
Diversification Opportunities for Migdal Insurance and Harel Insurance
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Migdal and Harel is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Harel Insurance Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harel Insurance Inve 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 Harel Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harel Insurance Inve has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Harel Insurance go up and down completely randomly.
Pair Corralation between Migdal Insurance and Harel Insurance
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.76 times more return on investment than Harel Insurance. However, Migdal Insurance is 1.31 times less risky than Harel Insurance. It trades about 0.51 of its potential returns per unit of risk. Harel Insurance Investments is currently generating about 0.31 per unit of risk. If you would invest 66,880 in Migdal Insurance on October 24, 2024 and sell it today you would earn a total of 7,020 from holding Migdal Insurance or generate 10.5% 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. Harel Insurance Investments
Performance |
| Timeline |
| Migdal Insurance |
| Harel Insurance Inve |
Migdal Insurance and Harel Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Harel Insurance
The main advantage of trading using opposite Migdal Insurance and Harel Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Harel Insurance 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 Harel Insurance will offset losses from the drop in Harel Insurance'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 |
| Harel Insurance vs. Migdal Insurance | Harel Insurance vs. Clal Insurance Enterprises | Harel Insurance vs. Bank Hapoalim | Harel Insurance vs. Bank Leumi Le Israel |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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