Correlation Between Migdal Insurance and Mobile Max

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

By analyzing existing cross correlation between Migdal Insurance and Mobile Max M, you can compare the effects of market volatilities on Migdal Insurance and Mobile Max 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 Mobile Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Migdal Insurance and Mobile Max.

Diversification Opportunities for Migdal Insurance and Mobile Max

-0.7

Correlation Coefficient

Migdal Insurance  Mobile Max

Excellent diversification

The 3 months correlation between Migdal and Mobile is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Mobile Max M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Max M 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 Mobile Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Max M has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Mobile Max go up and down completely randomly.

Pair Corralation between Migdal Insurance and Mobile Max

Assuming the 90 days trading horizon Migdal Insurance is expected to generate 0.56 times more return on investment than Mobile Max. However, Migdal Insurance is 1.8 times less risky than Mobile Max. It trades about 0.53 of its potential returns per unit of risk. Mobile Max M is currently generating about 0.01 per unit of risk. If you would invest  45,890  in Migdal Insurance on September 14, 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	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Migdal Insurance  vs.  Mobile Max M

Migdal Insurance

Risk-Adjusted Performance

41 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Migdal Insurance are ranked lower than 41 (%) 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.

Mobile Max M

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile Max M has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mobile Max is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Migdal Insurance and Mobile Max

The main advantage of trading using opposite Migdal Insurance and Mobile Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Migdal Insurance position performs unexpectedly, Mobile Max 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 Mobile Max will offset losses from the drop in Mobile Max's long position.

The idea behind Migdal Insurance and Mobile Max M 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.