Correlation Between Migdal Insurance and Citigroup
Can any of the company-specific risk be diversified away by investing in both Migdal Insurance and Citigroup 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 Migdal Insurance and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Migdal Insurance and Citigroup, you can compare the effects of market volatilities on Migdal Insurance and Citigroup 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 Migdal Insurance with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Citigroup.
Diversification Opportunities for Migdal Insurance and Citigroup
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Migdal and Citigroup is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and Migdal Insurance 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 Migdal Insurance are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Citigroup go up and down completely randomly.
Pair Corralation between Migdal Insurance and Citigroup
Assuming the 90 days trading horizon Migdal Insurance is expected to generate 20.02 times less return on investment than Citigroup. In addition to that, Migdal Insurance is 1.33 times more volatile than Citigroup. It trades about 0.0 of its total potential returns per unit of risk. Citigroup is currently generating about 0.06 per unit of volatility. If you would invest 4,320 in Citigroup on January 25, 2024 and sell it today you would earn a total of 1,927 from holding Citigroup or generate 44.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 78.68% |
Values | Daily Returns |
Migdal Insurance vs. Citigroup
Performance |
Timeline |
Migdal Insurance |
Citigroup |
Migdal Insurance and Citigroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Migdal Insurance and Citigroup
The main advantage of trading using opposite Migdal Insurance and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.Migdal Insurance vs. Mizrahi Tefahot | Migdal Insurance vs. Bezeq Israeli Telecommunication | Migdal Insurance vs. Elbit Systems |
Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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