Correlation Between ICL Israel and Delek
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Delek 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 Delek 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 Delek Group, you can compare the effects of market volatilities on ICL Israel and Delek 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 Delek. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Delek.
Diversification Opportunities for ICL Israel and Delek
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICL and Delek is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Delek Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Group 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 Delek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Group has no effect on the direction of ICL Israel i.e., ICL Israel and Delek go up and down completely randomly.
Pair Corralation between ICL Israel and Delek
Assuming the 90 days trading horizon ICL Israel Chemicals is expected to under-perform the Delek. In addition to that, ICL Israel is 1.01 times more volatile than Delek Group. It trades about -0.04 of its total potential returns per unit of risk. Delek Group is currently generating about 0.06 per unit of volatility. If you would invest 4,319,312 in Delek Group on September 3, 2024 and sell it today you would earn a total of 553,688 from holding Delek Group or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Delek Group
Performance |
| Timeline |
| ICL Israel Chemicals |
| Delek Group |
ICL Israel and Delek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Delek
The main advantage of trading using opposite ICL Israel and Delek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Delek 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 Delek will offset losses from the drop in Delek's long position.| ICL Israel vs. Elbit Systems | ICL Israel vs. Bezeq Israeli Telecommunication | ICL Israel vs. Bank Hapoalim | ICL Israel vs. Teva Pharmaceutical Industries |
| Delek vs. Fattal 1998 Holdings | Delek vs. El Al Israel | Delek vs. Bank Leumi Le Israel | Delek 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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