Correlation Between Spring Ventures and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Spring Ventures 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 Spring Ventures and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Ventures and Migdal Insurance, you can compare the effects of market volatilities on Spring Ventures 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 Spring Ventures with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Ventures and Migdal Insurance.
Diversification Opportunities for Spring Ventures and Migdal Insurance
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spring and Migdal is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Spring Ventures and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Spring Ventures 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 Spring Ventures 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 Spring Ventures i.e., Spring Ventures and Migdal Insurance go up and down completely randomly.
Pair Corralation between Spring Ventures and Migdal Insurance
Assuming the 90 days trading horizon Spring Ventures is expected to under-perform the Migdal Insurance. In addition to that, Spring Ventures is 1.76 times more volatile than Migdal Insurance. It trades about -0.01 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.07 per unit of volatility. If you would invest 40,064 in Migdal Insurance on September 13, 2024 and sell it today you would earn a total of 28,236 from holding Migdal Insurance or generate 70.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Spring Ventures vs. Migdal Insurance
Performance |
| Timeline |
| Spring Ventures |
| Migdal Insurance |
Spring Ventures and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Ventures and Migdal Insurance
The main advantage of trading using opposite Spring Ventures and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Ventures 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.| Spring Ventures vs. Migdal Insurance | Spring Ventures vs. Clal Insurance Enterprises | Spring Ventures vs. Bank Leumi Le Israel | Spring Ventures vs. Israel Discount Bank |
| Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Israel Discount Bank | Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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