Correlation Between Israel and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Israel and Arkema SA 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 Israel and Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel and Arkema SA, you can compare the effects of market volatilities on Israel and Arkema SA 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 Israel with a short position of Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel and Arkema SA.
Diversification Opportunities for Israel and Arkema SA
Very good diversification
The 3 months correlation between Israel and Arkema is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Israel and Arkema SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA and 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 Israel are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA has no effect on the direction of Israel i.e., Israel and Arkema SA go up and down completely randomly.
Pair Corralation between Israel and Arkema SA
Assuming the 90 days horizon Israel is expected to generate 3.77 times more return on investment than Arkema SA. However, Israel is 3.77 times more volatile than Arkema SA. It trades about 0.06 of its potential returns per unit of risk. Arkema SA is currently generating about -0.08 per unit of risk. If you would invest 21,900 in Israel on December 5, 2024 and sell it today you would earn a total of 6,600 from holding Israel or generate 30.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 35.25% |
| Values | Daily Returns |
Israel vs. Arkema SA
Performance |
| Timeline |
| Israel |
| Arkema SA |
Israel and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel and Arkema SA
The main advantage of trading using opposite Israel and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Israel vs. EastGroup Properties | ||
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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