Correlation Between Tel Aviv and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Tel Aviv 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 Tel Aviv and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Migdal Insurance, you can compare the effects of market volatilities on Tel Aviv 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 Tel Aviv with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Migdal Insurance.
Diversification Opportunities for Tel Aviv and Migdal Insurance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tel and Migdal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Tel Aviv 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 Tel Aviv 35 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 Tel Aviv i.e., Tel Aviv and Migdal Insurance go up and down completely randomly.
Pair Corralation between Tel Aviv and Migdal Insurance
Assuming the 90 days trading horizon Tel Aviv is expected to generate 2.47 times less return on investment than Migdal Insurance. But when comparing it to its historical volatility, Tel Aviv 35 is 2.03 times less risky than Migdal Insurance. It trades about 0.28 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 57,750 in Migdal Insurance on August 24, 2024 and sell it today you would earn a total of 5,390 from holding Migdal Insurance or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.12% |
| Values | Daily Returns |
Tel Aviv 35 vs. Migdal Insurance
Performance |
| Timeline |
Tel Aviv and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Migdal Insurance
Pair trading matchups for Migdal Insurance
Pair Trading with Tel Aviv and Migdal Insurance
The main advantage of trading using opposite Tel Aviv and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv 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.| Tel Aviv vs. Technoplus Ventures | Tel Aviv vs. Silver Castle Holdings | Tel Aviv vs. Rapac Communication Infrastructure | Tel Aviv vs. Unicorn Technologies |
| Migdal Insurance vs. Harel Insurance Investments | Migdal Insurance vs. Clal Insurance Enterprises | Migdal Insurance vs. Bank Hapoalim | Migdal Insurance vs. Bank Leumi Le Israel |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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