Correlation Between IsraelLtd and AGC
Can any of the company-specific risk be diversified away by investing in both IsraelLtd 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 IsraelLtd 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 IsraelLtd 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 IsraelLtd with a short position of AGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of IsraelLtd and AGC.
Diversification Opportunities for IsraelLtd and AGC
Weak diversification
The 3 months correlation between IsraelLtd 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 IsraelLtd 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 IsraelLtd i.e., IsraelLtd and AGC go up and down completely randomly.
Pair Corralation between IsraelLtd and AGC
Assuming the 90 days horizon Israel is expected to under-perform the AGC. In addition to that, IsraelLtd is 2.02 times more volatile than AGC Inc ADR. It trades about -0.03 of its total potential returns per unit of risk. AGC Inc ADR is currently generating about 0.0 per unit of volatility. If you would invest 656.00 in AGC Inc ADR on August 24, 2024 and sell it today you would lose (63.00) from holding AGC Inc ADR or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.93% |
| Values | Daily Returns |
Israel vs. AGC Inc ADR
Performance |
| Timeline |
| IsraelLtd |
| AGC Inc ADR |
IsraelLtd and AGC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IsraelLtd and AGC
The main advantage of trading using opposite IsraelLtd and AGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IsraelLtd 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.| IsraelLtd vs. First Graphene | IsraelLtd vs. HUMANA INC | IsraelLtd vs. Aquagold International | IsraelLtd vs. Barloworld Ltd ADR |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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