Correlation Between Migdal Insurance and Homebiogas
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Homebiogas 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 Homebiogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Homebiogas, you can compare the effects of market volatilities on Migdal Insurance and Homebiogas 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 Homebiogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Homebiogas.
Diversification Opportunities for Migdal Insurance and Homebiogas
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Migdal and Homebiogas is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Homebiogas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homebiogas 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 Homebiogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homebiogas has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Homebiogas go up and down completely randomly.
Pair Corralation between Migdal Insurance and Homebiogas
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.43 times more return on investment than Homebiogas. However, Migdal Insurance is 2.32 times less risky than Homebiogas. It trades about 0.22 of its potential returns per unit of risk. Homebiogas is currently generating about -0.46 per unit of risk. If you would invest 60,900 in Migdal Insurance on September 1, 2024 and sell it today you would earn a total of 3,790 from holding Migdal Insurance or generate 6.22% 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. Homebiogas
Performance |
| Timeline |
| Migdal Insurance |
| Homebiogas |
Migdal Insurance and Homebiogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Homebiogas
The main advantage of trading using opposite Migdal Insurance and Homebiogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Homebiogas 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 Homebiogas will offset losses from the drop in Homebiogas' long position.| Migdal Insurance vs. Menif Financial Services | Migdal Insurance vs. Accel Solutions Group | Migdal Insurance vs. Rani Zim Shopping | Migdal Insurance vs. Rapac Communication Infrastructure |
| Homebiogas vs. Migdal Insurance | Homebiogas vs. Clal Insurance Enterprises | Homebiogas vs. Veridis Environment | Homebiogas vs. ICL Israel Chemicals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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