Correlation Between Israel and AGC
Can any of the company-specific risk be diversified away by investing in both Israel and AGC 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 AGC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel and AGC Inc ADR, you can compare the effects of market volatilities on Israel and AGC 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 AGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel and AGC.
Diversification Opportunities for Israel and AGC
Very good diversification
The 3 months correlation between Israel and AGC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Israel and AGC Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGC Inc ADR 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 AGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGC Inc ADR has no effect on the direction of Israel i.e., Israel and AGC go up and down completely randomly.
Pair Corralation between Israel and AGC
Assuming the 90 days horizon Israel is expected to generate 3.22 times more return on investment than AGC. However, Israel is 3.22 times more volatile than AGC Inc ADR. It trades about 0.06 of its potential returns per unit of risk. AGC Inc ADR is currently generating about 0.0 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel vs. AGC Inc ADR
Performance |
| Timeline |
| Israel |
| AGC Inc ADR |
Israel and AGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel and AGC
The main advantage of trading using opposite Israel and AGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel position performs unexpectedly, AGC 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 AGC will offset losses from the drop in AGC'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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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