Correlation Between Magic Software and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Magic Software and Migdal 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 Magic Software and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magic Software Enterprises and Migdal Insurance, you can compare the effects of market volatilities on Magic Software and Migdal 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 Magic Software with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Migdal Insurance.
Diversification Opportunities for Magic Software and Migdal Insurance
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and Migdal is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Magic Software 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 Magic Software Enterprises are associated (or correlated) with Migdal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Migdal Insurance has no effect on the direction of Magic Software i.e., Magic Software and Migdal Insurance go up and down completely randomly.
Pair Corralation between Magic Software and Migdal Insurance
Assuming the 90 days trading horizon Magic Software Enterprises is expected to under-perform the Migdal Insurance. In addition to that, Magic Software is 1.08 times more volatile than Migdal Insurance. It trades about -0.02 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.05 per unit of volatility. If you would invest 43,754 in Migdal Insurance on August 29, 2024 and sell it today you would earn a total of 20,346 from holding Migdal Insurance or generate 46.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Migdal Insurance
Performance |
| Timeline |
| Magic Software Enter |
| Migdal Insurance |
Magic Software and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Migdal Insurance
The main advantage of trading using opposite Magic Software and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Migdal 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 Migdal Insurance will offset losses from the drop in Migdal Insurance's long position.| Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. B Communications | Magic Software vs. Petrochemical |
| Migdal Insurance vs. Elbit Systems | Migdal Insurance vs. Discount Investment Corp | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. AudioCodes |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |