Correlation Between Abra Information and ICL Israel
Can any of the company-specific risk be diversified away by investing in both Abra Information and ICL Israel 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 Abra Information and ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abra Information Technologies and ICL Israel Chemicals, you can compare the effects of market volatilities on Abra Information and ICL Israel 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 Abra Information with a short position of ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abra Information and ICL Israel.
Diversification Opportunities for Abra Information and ICL Israel
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Abra and ICL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Abra Information Technologies and ICL Israel Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICL Israel Chemicals and Abra Information 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 Abra Information Technologies are associated (or correlated) with ICL Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICL Israel Chemicals has no effect on the direction of Abra Information i.e., Abra Information and ICL Israel go up and down completely randomly.
Pair Corralation between Abra Information and ICL Israel
Assuming the 90 days trading horizon Abra Information Technologies is expected to generate 0.96 times more return on investment than ICL Israel. However, Abra Information Technologies is 1.04 times less risky than ICL Israel. It trades about -0.04 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about -0.04 per unit of risk. If you would invest 39,450 in Abra Information Technologies on August 27, 2024 and sell it today you would lose (12,250) from holding Abra Information Technologies or give up 31.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abra Information Technologies vs. ICL Israel Chemicals
Performance |
| Timeline |
| Abra Information Tec |
| ICL Israel Chemicals |
Abra Information and ICL Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abra Information and ICL Israel
The main advantage of trading using opposite Abra Information and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abra Information position performs unexpectedly, ICL Israel 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 ICL Israel will offset losses from the drop in ICL Israel's long position.| Abra Information vs. Batm Advanced Communications | Abra Information vs. Rapac Communication Infrastructure | Abra Information vs. Arad Investment Industrial | Abra Information vs. Harel Insurance Investments |
| ICL Israel vs. Elbit Systems | ICL Israel vs. Bezeq Israeli Telecommunication | ICL Israel vs. Bank Hapoalim | ICL Israel vs. Teva Pharmaceutical Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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