Correlation Between ITC Holdings and Migdal Insurance
Can any of the company-specific risk be diversified away by investing in both ITC Holdings 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 ITC Holdings and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITC Holdings Corp and Migdal Insurance, you can compare the effects of market volatilities on ITC Holdings 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 ITC Holdings with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITC Holdings and Migdal Insurance.
Diversification Opportunities for ITC Holdings and Migdal Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ITC and Migdal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ITC Holdings Corp and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and ITC Holdings 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 ITC Holdings Corp 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 ITC Holdings i.e., ITC Holdings and Migdal Insurance go up and down completely randomly.
Pair Corralation between ITC Holdings and Migdal Insurance
If you would invest 42,840 in Migdal Insurance on January 20, 2024 and sell it today you would earn a total of 3,660 from holding Migdal Insurance or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ITC Holdings Corp vs. Migdal Insurance
Performance |
| Timeline |
| ITC Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Migdal Insurance |
ITC Holdings and Migdal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITC Holdings and Migdal Insurance
The main advantage of trading using opposite ITC Holdings and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITC Holdings 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.| ITC Holdings vs. Welsbach Technology Metals | ITC Holdings vs. Centerra Gold | ITC Holdings vs. Marchex | ITC Holdings vs. Imperial Metals |
| Migdal Insurance vs. Rani Zim Shopping | Migdal Insurance vs. Accel Solutions Group | Migdal Insurance vs. Rapac Communication Infrastructure |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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