Correlation Between ICL Israel and Sella Real
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Sella Real 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 Sella Real 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 Sella Real Estate, you can compare the effects of market volatilities on ICL Israel and Sella Real 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 Sella Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Sella Real.
Diversification Opportunities for ICL Israel and Sella Real
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICL and Sella is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Sella Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sella Real Estate 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 Sella Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sella Real Estate has no effect on the direction of ICL Israel i.e., ICL Israel and Sella Real go up and down completely randomly.
Pair Corralation between ICL Israel and Sella Real
Assuming the 90 days trading horizon ICL Israel is expected to generate 1.41 times less return on investment than Sella Real. In addition to that, ICL Israel is 1.31 times more volatile than Sella Real Estate. It trades about 0.05 of its total potential returns per unit of risk. Sella Real Estate is currently generating about 0.1 per unit of volatility. If you would invest 74,313 in Sella Real Estate on October 22, 2024 and sell it today you would earn a total of 23,587 from holding Sella Real Estate or generate 31.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Sella Real Estate
Performance |
| Timeline |
| ICL Israel Chemicals |
| Sella Real Estate |
ICL Israel and Sella Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Sella Real
The main advantage of trading using opposite ICL Israel and Sella Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Sella Real 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 Sella Real will offset losses from the drop in Sella Real'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 |
| Sella Real vs. Reit 1 | Sella Real vs. Bank Hapoalim | Sella Real vs. Azrieli Group | Sella Real vs. Amot Investments |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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