Correlation Between Menif Financial and Migdal Insurance

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

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

Diversification Opportunities for Menif Financial and Migdal Insurance

0.83

Correlation Coefficient

Menif Financial  Migdal Insurance

Very poor diversification

The 3 months correlation between Menif and Migdal is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Menif Financial Services and Migdal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Migdal Insurance and Menif Financial 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 Menif Financial Services 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 Menif Financial i.e., Menif Financial and Migdal Insurance go up and down completely randomly.

Pair Corralation between Menif Financial and Migdal Insurance

Assuming the 90 days trading horizon Menif Financial Services is expected to generate 1.13 times more return on investment than Migdal Insurance. However, Menif Financial is 1.13 times more volatile than Migdal Insurance. It trades about 0.12 of its potential returns per unit of risk. Migdal Insurance is currently generating about 0.02 per unit of risk. If you would invest  150,060  in Menif Financial Services on December 30, 2024 and sell it today you would earn a total of  23,740  from holding Menif Financial Services or generate 15.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Menif Financial Services  vs.  Migdal Insurance

Menif Financial Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Menif Financial Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Menif Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Migdal Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Migdal Insurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Migdal Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Menif Financial and Migdal Insurance

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

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.