Correlation Between Scotts Miracle and ICL Israel
Can any of the company-specific risk be diversified away by investing in both Scotts Miracle and ICL Israel 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 Scotts Miracle and ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scotts Miracle Gro and ICL Israel Chemicals, you can compare the effects of market volatilities on Scotts Miracle and ICL Israel 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 Scotts Miracle with a short position of ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts Miracle and ICL Israel.
Diversification Opportunities for Scotts Miracle and ICL Israel
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scotts and ICL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro and ICL Israel Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICL Israel Chemicals and Scotts Miracle 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 Scotts Miracle Gro are associated (or correlated) with ICL Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICL Israel Chemicals has no effect on the direction of Scotts Miracle i.e., Scotts Miracle and ICL Israel go up and down completely randomly.
Pair Corralation between Scotts Miracle and ICL Israel
Considering the 90-day investment horizon Scotts Miracle Gro is expected to generate 1.32 times more return on investment than ICL Israel. However, Scotts Miracle is 1.32 times more volatile than ICL Israel Chemicals. It trades about 0.06 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about 0.0 per unit of risk. If you would invest 6,407 in Scotts Miracle Gro on August 24, 2024 and sell it today you would earn a total of 1,241 from holding Scotts Miracle Gro or generate 19.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scotts Miracle Gro vs. ICL Israel Chemicals
Performance |
| Timeline |
| Scotts Miracle Gro |
| ICL Israel Chemicals |
Scotts Miracle and ICL Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotts Miracle and ICL Israel
The main advantage of trading using opposite Scotts Miracle and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts Miracle position performs unexpectedly, ICL Israel 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 ICL Israel will offset losses from the drop in ICL Israel's long position.| Scotts Miracle vs. Corteva | Scotts Miracle vs. CF Industries Holdings | Scotts Miracle vs. American Vanguard | Scotts Miracle vs. Intrepid Potash |
| ICL Israel vs. CF Industries Holdings | ICL Israel vs. The Mosaic | ICL Israel vs. American Vanguard | ICL Israel vs. CVR Partners LP |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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