Correlation Between ICL Israel and Enlightify
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Enlightify 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 Enlightify 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 Enlightify, you can compare the effects of market volatilities on ICL Israel and Enlightify 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 Enlightify. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Enlightify.
Diversification Opportunities for ICL Israel and Enlightify
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ICL and Enlightify is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify 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 Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of ICL Israel i.e., ICL Israel and Enlightify go up and down completely randomly.
Pair Corralation between ICL Israel and Enlightify
Considering the 90-day investment horizon ICL Israel Chemicals is expected to generate 0.35 times more return on investment than Enlightify. However, ICL Israel Chemicals is 2.84 times less risky than Enlightify. It trades about 0.54 of its potential returns per unit of risk. Enlightify is currently generating about -0.34 per unit of risk. If you would invest 498.00 in ICL Israel Chemicals on October 25, 2024 and sell it today you would earn a total of 108.00 from holding ICL Israel Chemicals or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Enlightify
Performance |
| Timeline |
| ICL Israel Chemicals |
| Enlightify |
ICL Israel and Enlightify Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Enlightify
The main advantage of trading using opposite ICL Israel and Enlightify positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Enlightify 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 Enlightify will offset losses from the drop in Enlightify's long position.| ICL Israel vs. CF Industries Holdings | ICL Israel vs. The Mosaic | ICL Israel vs. American Vanguard | ICL Israel vs. CVR Partners LP |
| Enlightify vs. CF Industries Holdings | Enlightify vs. American Vanguard | Enlightify vs. FMC Corporation | Enlightify vs. ICL Israel Chemicals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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