Correlation Between Intel and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Migdal Insurance, you can compare the effects of market volatilities on Intel 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 Intel with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Migdal Insurance.
Diversification Opportunities for Intel and Migdal Insurance
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Migdal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Intel 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 Intel 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 Intel i.e., Intel and Migdal Insurance go up and down completely randomly.
Pair Corralation between Intel and Migdal Insurance
Given the investment horizon of 90 days Intel is expected to under-perform the Migdal Insurance. In addition to that, Intel is 1.21 times more volatile than Migdal Insurance. It trades about -0.19 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.15 per unit of volatility. If you would invest 40,000 in Migdal Insurance on January 24, 2024 and sell it today you would earn a total of 6,500 from holding Migdal Insurance or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 79.37% |
| Values | Daily Returns |
Intel vs. Migdal Insurance
Performance |
| Timeline |
| Intel |
| Migdal Insurance |
Intel and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Migdal Insurance
The main advantage of trading using opposite Intel and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.The idea behind Intel and Migdal Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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