Correlation Between ICL Israel and Wesure Global
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Wesure Global 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 Wesure Global 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 Wesure Global Tech, you can compare the effects of market volatilities on ICL Israel and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Wesure Global.
Diversification Opportunities for ICL Israel and Wesure Global
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICL and Wesure is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of ICL Israel i.e., ICL Israel and Wesure Global go up and down completely randomly.
Pair Corralation between ICL Israel and Wesure Global
Assuming the 90 days trading horizon ICL Israel is expected to generate 4.43 times less return on investment than Wesure Global. In addition to that, ICL Israel is 1.09 times more volatile than Wesure Global Tech. It trades about 0.13 of its total potential returns per unit of risk. Wesure Global Tech is currently generating about 0.63 per unit of volatility. If you would invest 36,810 in Wesure Global Tech on August 30, 2024 and sell it today you would earn a total of 12,930 from holding Wesure Global Tech or generate 35.13% 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. Wesure Global Tech
Performance |
| Timeline |
| ICL Israel Chemicals |
| Wesure Global Tech |
ICL Israel and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Wesure Global
The main advantage of trading using opposite ICL Israel and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global'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 |
| Wesure Global vs. Opal Balance | Wesure Global vs. B Communications | Wesure Global vs. Holmes Place International | Wesure Global vs. Nova |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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