Correlation Between ICL Israel and Intrepid Potash
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Intrepid Potash 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 Intrepid Potash 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 Intrepid Potash, you can compare the effects of market volatilities on ICL Israel and Intrepid Potash 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 Intrepid Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Intrepid Potash.
Diversification Opportunities for ICL Israel and Intrepid Potash
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICL and Intrepid is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Intrepid Potash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Potash 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 Intrepid Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Potash has no effect on the direction of ICL Israel i.e., ICL Israel and Intrepid Potash go up and down completely randomly.
Pair Corralation between ICL Israel and Intrepid Potash
Considering the 90-day investment horizon ICL Israel is expected to generate 1.06 times less return on investment than Intrepid Potash. But when comparing it to its historical volatility, ICL Israel Chemicals is 1.16 times less risky than Intrepid Potash. It trades about 0.0 of its potential returns per unit of risk. Intrepid Potash is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,761 in Intrepid Potash on August 24, 2024 and sell it today you would lose (81.00) from holding Intrepid Potash or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Intrepid Potash
Performance |
| Timeline |
| ICL Israel Chemicals |
| Intrepid Potash |
ICL Israel and Intrepid Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Intrepid Potash
The main advantage of trading using opposite ICL Israel and Intrepid Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Intrepid Potash 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 Intrepid Potash will offset losses from the drop in Intrepid Potash'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 |
| Intrepid Potash vs. The Mosaic | Intrepid Potash vs. Nutrien | Intrepid Potash vs. Corteva | Intrepid Potash vs. FMC Corporation |
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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