Correlation Between ICL Israel and Itafos
Can any of the company-specific risk be diversified away by investing in both ICL Israel and Itafos 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 Itafos 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 Itafos Inc, you can compare the effects of market volatilities on ICL Israel and Itafos 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 Itafos. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Itafos.
Diversification Opportunities for ICL Israel and Itafos
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ICL and Itafos is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Itafos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos Inc 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 Itafos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Inc has no effect on the direction of ICL Israel i.e., ICL Israel and Itafos go up and down completely randomly.
Pair Corralation between ICL Israel and Itafos
Considering the 90-day investment horizon ICL Israel Chemicals is expected to generate 1.13 times more return on investment than Itafos. However, ICL Israel is 1.13 times more volatile than Itafos Inc. It trades about 0.17 of its potential returns per unit of risk. Itafos Inc is currently generating about 0.04 per unit of risk. If you would invest 417.00 in ICL Israel Chemicals on August 31, 2024 and sell it today you would earn a total of 39.00 from holding ICL Israel Chemicals or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICL Israel Chemicals vs. Itafos Inc
Performance |
| Timeline |
| ICL Israel Chemicals |
| Itafos Inc |
ICL Israel and Itafos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICL Israel and Itafos
The main advantage of trading using opposite ICL Israel and Itafos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Itafos 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 Itafos will offset losses from the drop in Itafos' long position.| ICL Israel vs. CF Industries Holdings | ICL Israel vs. The Mosaic | ICL Israel vs. American Vanguard | ICL Israel vs. CVR Partners LP |
| Itafos vs. Danakali | Itafos vs. Intrepid Potash | Itafos vs. Verde Agritech | Itafos vs. Yara International ASA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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