Correlation Between Enlight Renewable and ICL Israel
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable 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 Enlight Renewable and ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and ICL Israel Chemicals, you can compare the effects of market volatilities on Enlight Renewable 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 Enlight Renewable with a short position of ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and ICL Israel.
Diversification Opportunities for Enlight Renewable and ICL Israel
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enlight and ICL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy 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 Enlight Renewable 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 Enlight Renewable Energy 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 Enlight Renewable i.e., Enlight Renewable and ICL Israel go up and down completely randomly.
Pair Corralation between Enlight Renewable and ICL Israel
Assuming the 90 days trading horizon Enlight Renewable Energy is expected to generate 0.88 times more return on investment than ICL Israel. However, Enlight Renewable Energy is 1.13 times less risky than ICL Israel. It trades about -0.01 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about -0.02 per unit of risk. If you would invest 624,500 in Enlight Renewable Energy on August 29, 2024 and sell it today you would lose (26,800) from holding Enlight Renewable Energy or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Renewable Energy vs. ICL Israel Chemicals
Performance |
| Timeline |
| Enlight Renewable Energy |
| ICL Israel Chemicals |
Enlight Renewable and ICL Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and ICL Israel
The main advantage of trading using opposite Enlight Renewable and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable 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.| Enlight Renewable vs. Energix Renewable Energies | Enlight Renewable vs. Doral Group Renewable | Enlight Renewable vs. Elbit Systems | Enlight Renewable vs. Electreon Wireless |
| ICL Israel vs. Elbit Systems | ICL Israel vs. Bezeq Israeli Telecommunication | ICL Israel vs. Teva Pharmaceutical Industries | ICL Israel 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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