Correlation Between Tel Aviv and Icon
Can any of the company-specific risk be diversified away by investing in both Tel Aviv and Icon 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 Tel Aviv and Icon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tel Aviv 35 and Icon Group, you can compare the effects of market volatilities on Tel Aviv and Icon 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 Tel Aviv with a short position of Icon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tel Aviv and Icon.
Diversification Opportunities for Tel Aviv and Icon
Very weak diversification
The 3 months correlation between Tel and Icon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tel Aviv 35 and Icon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Group and Tel Aviv 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 Tel Aviv 35 are associated (or correlated) with Icon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Group has no effect on the direction of Tel Aviv i.e., Tel Aviv and Icon go up and down completely randomly.
Pair Corralation between Tel Aviv and Icon
Assuming the 90 days trading horizon Tel Aviv 35 is expected to generate 0.48 times more return on investment than Icon. However, Tel Aviv 35 is 2.07 times less risky than Icon. It trades about 0.06 of its potential returns per unit of risk. Icon Group is currently generating about -0.02 per unit of risk. If you would invest 183,582 in Tel Aviv 35 on September 2, 2024 and sell it today you would earn a total of 42,467 from holding Tel Aviv 35 or generate 23.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tel Aviv 35 vs. Icon Group
Performance |
| Timeline |
Tel Aviv and Icon Volatility Contrast
Predicted Return Density |
| Returns |
Tel Aviv 35
Pair trading matchups for Tel Aviv
Icon Group
Pair trading matchups for Icon
Pair Trading with Tel Aviv and Icon
The main advantage of trading using opposite Tel Aviv and Icon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tel Aviv position performs unexpectedly, Icon 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 Icon will offset losses from the drop in Icon's long position.| Tel Aviv vs. Israel China Biotechnology | Tel Aviv vs. Magic Software Enterprises | Tel Aviv vs. Feat Fund Investments | Tel Aviv vs. Arad Investment Industrial |
| Icon vs. Automatic Bank Services | Icon vs. Israel China Biotechnology | Icon vs. Veridis Environment | Icon vs. Millennium Food Tech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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