Correlation Between ICL Israel and Canzon Israel
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Canzon 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 ICL Israel and Canzon Israel 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 Canzon Israel, you can compare the effects of market volatilities on ICL Israel and Canzon 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 ICL Israel with a short position of Canzon Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Canzon Israel.
Diversification Opportunities for ICL Israel and Canzon Israel
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICL and Canzon is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Canzon Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canzon Israel 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 Canzon Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canzon Israel has no effect on the direction of ICL Israel i.e., ICL Israel and Canzon Israel go up and down completely randomly.
Pair Corralation between ICL Israel and Canzon Israel
Assuming the 90 days trading horizon ICL Israel Chemicals is expected to generate 1.69 times more return on investment than Canzon Israel. However, ICL Israel is 1.69 times more volatile than Canzon Israel. It trades about 0.13 of its potential returns per unit of risk. Canzon Israel is currently generating about -0.16 per unit of risk. If you would invest 154,500 in ICL Israel Chemicals on September 1, 2024 and sell it today you would earn a total of 9,500 from holding ICL Israel Chemicals or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Canzon Israel
Performance |
| Timeline |
| ICL Israel Chemicals |
| Canzon Israel |
ICL Israel and Canzon Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Canzon Israel
The main advantage of trading using opposite ICL Israel and Canzon Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Canzon 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 Canzon Israel will offset losses from the drop in Canzon Israel's long position.| ICL Israel vs. Maytronics | ICL Israel vs. Shufersal | ICL Israel vs. Alony Hetz Properties | ICL Israel vs. Danel |
| Canzon Israel vs. Brainsway | Canzon Israel vs. Mivne Real Estate | Canzon Israel vs. Photomyne | Canzon Israel vs. Israel Land Development |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |