Correlation Between ICL Israel and G City
Can any of the company-specific risk be diversified away by investing in both ICL Israel and G City 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 ICL Israel and G City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICL Israel Chemicals and G City, you can compare the effects of market volatilities on ICL Israel and G City 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 ICL Israel with a short position of G City. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and G City.
Diversification Opportunities for ICL Israel and G City
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICL and GCT is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and G City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G City and ICL 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 ICL Israel Chemicals are associated (or correlated) with G City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G City has no effect on the direction of ICL Israel i.e., ICL Israel and G City go up and down completely randomly.
Pair Corralation between ICL Israel and G City
Assuming the 90 days trading horizon ICL Israel Chemicals is expected to generate 1.0 times more return on investment than G City. However, ICL Israel Chemicals is 1.0 times less risky than G City. It trades about 0.22 of its potential returns per unit of risk. G City is currently generating about -0.2 per unit of risk. If you would invest 173,885 in ICL Israel Chemicals on December 3, 2024 and sell it today you would earn a total of 45,115 from holding ICL Israel Chemicals or generate 25.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ICL Israel Chemicals vs. G City
Performance |
Timeline |
ICL Israel Chemicals |
G City |
ICL Israel and G City Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICL Israel and G City
The main advantage of trading using opposite ICL Israel and G City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, G City 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 G City will offset losses from the drop in G City's long position.ICL Israel vs. Elbit Systems | ICL Israel vs. Bezeq Israeli Telecommunication | ICL Israel vs. Bank Hapoalim | ICL Israel vs. Teva Pharmaceutical Industries |
G City vs. Meitav Dash Investments | G City vs. B Communications | G City vs. More Mutual Funds | G City vs. Alrov Properties Lodgings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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