Correlation Between ICL Israel and Analyst IMS
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Analyst IMS 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 Analyst IMS 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 Analyst IMS Investment, you can compare the effects of market volatilities on ICL Israel and Analyst IMS 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 Analyst IMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Analyst IMS.
Diversification Opportunities for ICL Israel and Analyst IMS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICL and Analyst is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Analyst IMS Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analyst IMS Investment 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 Analyst IMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analyst IMS Investment has no effect on the direction of ICL Israel i.e., ICL Israel and Analyst IMS go up and down completely randomly.
Pair Corralation between ICL Israel and Analyst IMS
Assuming the 90 days trading horizon ICL Israel is expected to generate 6.46 times less return on investment than Analyst IMS. In addition to that, ICL Israel is 1.45 times more volatile than Analyst IMS Investment. It trades about 0.02 of its total potential returns per unit of risk. Analyst IMS Investment is currently generating about 0.17 per unit of volatility. If you would invest 382,000 in Analyst IMS Investment on September 24, 2024 and sell it today you would earn a total of 143,200 from holding Analyst IMS Investment or generate 37.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ICL Israel Chemicals vs. Analyst IMS Investment
Performance |
Timeline |
ICL Israel Chemicals |
Analyst IMS Investment |
ICL Israel and Analyst IMS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICL Israel and Analyst IMS
The main advantage of trading using opposite ICL Israel and Analyst IMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Analyst IMS 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 Analyst IMS will offset losses from the drop in Analyst IMS's long position.ICL Israel vs. Maytronics | ICL Israel vs. Shufersal | ICL Israel vs. Alony Hetz Properties | ICL Israel vs. Isracard |
Analyst IMS vs. Harel Insurance Investments | Analyst IMS vs. Clal Insurance Enterprises | Analyst IMS vs. Bank Hapoalim | Analyst IMS vs. Bank Leumi Le Israel |
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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