Correlation Between ICL Israel and Adgar Investments
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Adgar Investments 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 ICL Israel and Adgar Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICL Israel Chemicals and Adgar Investments and, you can compare the effects of market volatilities on ICL Israel and Adgar Investments 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 ICL Israel with a short position of Adgar Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Adgar Investments.
Diversification Opportunities for ICL Israel and Adgar Investments
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICL and Adgar is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Adgar Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adgar Investments and ICL Israel 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 ICL Israel Chemicals are associated (or correlated) with Adgar Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adgar Investments has no effect on the direction of ICL Israel i.e., ICL Israel and Adgar Investments go up and down completely randomly.
Pair Corralation between ICL Israel and Adgar Investments
Assuming the 90 days trading horizon ICL Israel is expected to generate 3.45 times less return on investment than Adgar Investments. In addition to that, ICL Israel is 1.15 times more volatile than Adgar Investments and. It trades about 0.02 of its total potential returns per unit of risk. Adgar Investments and is currently generating about 0.07 per unit of volatility. If you would invest 49,660 in Adgar Investments and on September 24, 2024 and sell it today you would earn a total of 8,240 from holding Adgar Investments and or generate 16.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ICL Israel Chemicals vs. Adgar Investments and
Performance |
Timeline |
ICL Israel Chemicals |
Adgar Investments |
ICL Israel and Adgar Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICL Israel and Adgar Investments
The main advantage of trading using opposite ICL Israel and Adgar Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Adgar Investments 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 Adgar Investments will offset losses from the drop in Adgar Investments' long position.ICL Israel vs. Maytronics | ICL Israel vs. Shufersal | ICL Israel vs. Alony Hetz Properties | ICL Israel vs. Isracard |
Adgar Investments vs. Israel Canada | Adgar Investments vs. Azrieli Group | Adgar Investments vs. Delek Group | Adgar Investments vs. Shikun Binui |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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