Correlation Between B Yair and Migdal Insurance

Can any of the company-specific risk be diversified away by investing in both B Yair 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 B Yair and Migdal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between B Yair Building and Migdal Insurance, you can compare the effects of market volatilities on B Yair 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 B Yair with a short position of Migdal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Yair and Migdal Insurance.

Diversification Opportunities for B Yair and Migdal Insurance

0.0

Correlation Coefficient

B Yair  Migdal Insurance

Pay attention - limited upside

The 3 months correlation between BYAR and Migdal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding B Yair Building and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and B Yair 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 B Yair Building 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 B Yair i.e., B Yair and Migdal Insurance go up and down completely randomly.

Pair Corralation between B Yair and Migdal Insurance

Assuming the 90 days trading horizon B Yair is expected to generate 1.92 times less return on investment than Migdal Insurance. In addition to that, B Yair is 2.04 times more volatile than Migdal Insurance. It trades about 0.14 of its total potential returns per unit of risk. Migdal Insurance is currently generating about 0.54 per unit of volatility. If you would invest  45,890  in Migdal Insurance on September 13, 2024 and sell it today you would earn a total of  22,410  from holding Migdal Insurance or generate 48.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

B Yair Building  vs.  Migdal Insurance

B Yair Building

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Yair Building are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Yair sustained solid returns over the last few months and may actually be approaching a breakup point.

Migdal Insurance

Risk-Adjusted Performance

42 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Migdal Insurance are ranked lower than 42 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Migdal Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with B Yair and Migdal Insurance

The main advantage of trading using opposite B Yair and Migdal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Yair 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 B Yair Building 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.