Correlation Between Migdal Insurance and Photomyne
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Photomyne 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 Photomyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Photomyne, you can compare the effects of market volatilities on Migdal Insurance and Photomyne 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 Photomyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Photomyne.
Diversification Opportunities for Migdal Insurance and Photomyne
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Migdal and Photomyne is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne 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 Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Photomyne go up and down completely randomly.
Pair Corralation between Migdal Insurance and Photomyne
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.52 times less return on investment than Photomyne. But when comparing it to its historical volatility, Migdal Insurance is 1.32 times less risky than Photomyne. It trades about 0.05 of its potential returns per unit of risk. Photomyne is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 169,200 in Photomyne on August 25, 2024 and sell it today you would earn a total of 108,400 from holding Photomyne or generate 64.07% 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. Photomyne
Performance |
| Timeline |
| Migdal Insurance |
| Photomyne |
Migdal Insurance and Photomyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Migdal Insurance and Photomyne
The main advantage of trading using opposite Migdal Insurance and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Photomyne 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 Photomyne will offset losses from the drop in Photomyne's long position.| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication |
| Photomyne vs. Aura Investments | Photomyne vs. Harel Insurance Investments | Photomyne vs. Analyst IMS Investment | Photomyne vs. Arad Investment Industrial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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