Correlation Between Migdal Insurance and Quicklizard

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

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

Diversification Opportunities for Migdal Insurance and Quicklizard

0.78

Correlation Coefficient

Migdal Insurance  Quicklizard

Poor diversification

The 3 months correlation between Migdal and Quicklizard is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Migdal Insurance and Quicklizard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quicklizard 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 Quicklizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quicklizard has no effect on the direction of Migdal Insurance i.e., Migdal Insurance and Quicklizard go up and down completely randomly.

Pair Corralation between Migdal Insurance and Quicklizard

Assuming the 90 days trading horizon Migdal Insurance is expected to generate 1.26 times more return on investment than Quicklizard. However, Migdal Insurance is 1.26 times more volatile than Quicklizard. It trades about 0.42 of its potential returns per unit of risk. Quicklizard is currently generating about 0.02 per unit of risk. If you would invest  48,594  in Migdal Insurance on September 26, 2024 and sell it today you would earn a total of  17,796  from holding Migdal Insurance or generate 36.62% return on investment over 90 days.

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

Migdal Insurance  vs.  Quicklizard

Migdal Insurance

Risk-Adjusted Performance

33 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Migdal Insurance are ranked lower than 33 (%) 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.

Quicklizard

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quicklizard are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Quicklizard 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 Quicklizard

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

The idea behind Migdal Insurance and Quicklizard 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.