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

0.0

Correlation Coefficient

IsraelLtd  AGC

Pay attention - limited upside

The 3 months correlation between IsraelLtd and AGC is 0.0. 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

If you would invest  601.00  in AGC Inc ADR on September 1, 2024 and sell it today you would earn a total of  42.00  from holding AGC Inc ADR or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Israel  vs.  AGC Inc ADR

IsraelLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Israel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, IsraelLtd is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AGC Inc ADR

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AGC Inc ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, AGC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

The idea behind Israel and AGC Inc ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.