Correlation Between ICL Israel and Hiron Trade
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Hiron Trade 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 Hiron Trade 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 Hiron Trade Investments Industrial, you can compare the effects of market volatilities on ICL Israel and Hiron Trade 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 Hiron Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Hiron Trade.
Diversification Opportunities for ICL Israel and Hiron Trade
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICL and Hiron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Hiron Trade Investments Indust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiron Trade Investments 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 Hiron Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiron Trade Investments has no effect on the direction of ICL Israel i.e., ICL Israel and Hiron Trade go up and down completely randomly.
Pair Corralation between ICL Israel and Hiron Trade
Assuming the 90 days trading horizon ICL Israel Chemicals is expected to generate 2.39 times more return on investment than Hiron Trade. However, ICL Israel is 2.39 times more volatile than Hiron Trade Investments Industrial. It trades about 0.09 of its potential returns per unit of risk. Hiron Trade Investments Industrial is currently generating about -0.39 per unit of risk. If you would invest 209,300 in ICL Israel Chemicals on November 29, 2024 and sell it today you would earn a total of 7,000 from holding ICL Israel Chemicals or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Hiron Trade Investments Indust
Performance |
| Timeline |
| ICL Israel Chemicals |
| Hiron Trade Investments |
ICL Israel and Hiron Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Hiron Trade
The main advantage of trading using opposite ICL Israel and Hiron Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Hiron Trade 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 Hiron Trade will offset losses from the drop in Hiron Trade'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 |
| Hiron Trade vs. The Gold Bond | Hiron Trade vs. Isras Investment | Hiron Trade vs. Sella Real Estate | Hiron Trade vs. Villar |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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