Correlation Between Migdal Insurance and Israel Corp
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Israel Corp 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 Israel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Israel Corp, you can compare the effects of market volatilities on Migdal Insurance and Israel Corp 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 Israel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Israel Corp.
Diversification Opportunities for Migdal Insurance and Israel Corp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Migdal and Israel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Israel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Corp 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 Israel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Corp has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Israel Corp go up and down completely randomly.
Pair Corralation between Migdal Insurance and Israel Corp
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.96 times more return on investment than Israel Corp. However, Migdal Insurance is 1.04 times less risky than Israel Corp. It trades about 0.06 of its potential returns per unit of risk. Israel Corp is currently generating about -0.04 per unit of risk. If you would invest 41,095 in Migdal Insurance on September 2, 2024 and sell it today you would earn a total of 23,595 from holding Migdal Insurance or generate 57.42% 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. Israel Corp
Performance |
| Timeline |
| Migdal Insurance |
| Israel Corp |
Migdal Insurance and Israel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Israel Corp
The main advantage of trading using opposite Migdal Insurance and Israel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Israel Corp 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 Israel Corp will offset losses from the drop in Israel Corp'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 |
| Israel Corp vs. Meitav Dash Investments | Israel Corp vs. Discount Investment Corp | Israel Corp vs. Migdal Insurance | Israel Corp vs. Israel Discount Bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |