Correlation Between Migdal Insurance and Hiron Trade
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Hiron Trade 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 Hiron Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Hiron Trade Investments Industrial, you can compare the effects of market volatilities on Migdal Insurance and Hiron Trade 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 Hiron Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Hiron Trade.
Diversification Opportunities for Migdal Insurance and Hiron Trade
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Migdal and Hiron is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Hiron Trade Investments Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiron Trade Investments 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 Hiron Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiron Trade Investments has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Hiron Trade go up and down completely randomly.
Pair Corralation between Migdal Insurance and Hiron Trade
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.39 times more return on investment than Hiron Trade. However, Migdal Insurance is 1.39 times more volatile than Hiron Trade Investments Industrial. It trades about 0.12 of its potential returns per unit of risk. Hiron Trade Investments Industrial is currently generating about 0.08 per unit of risk. If you would invest 41,930 in Migdal Insurance on August 26, 2024 and sell it today you would earn a total of 21,210 from holding Migdal Insurance or generate 50.58% 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. Hiron Trade Investments Indust
Performance |
| Timeline |
| Migdal Insurance |
| Hiron Trade Investments |
Migdal Insurance and Hiron Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Hiron Trade
The main advantage of trading using opposite Migdal Insurance and Hiron Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Hiron Trade 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 Hiron Trade will offset losses from the drop in Hiron Trade's long position.| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Bezeq Israeli Telecommunication | Migdal Insurance vs. Elbit Systems |
| Hiron Trade vs. The Gold Bond | Hiron Trade vs. Isras Investment | Hiron Trade vs. Sella Real Estate | Hiron Trade vs. Villar |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stocks Directory Find actively traded stocks across global markets |