Correlation Between IMCO Industries and ICL Israel
Can any of the company-specific risk be diversified away by investing in both IMCO Industries 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 IMCO Industries and ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMCO Industries and ICL Israel Chemicals, you can compare the effects of market volatilities on IMCO Industries 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 IMCO Industries with a short position of ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMCO Industries and ICL Israel.
Diversification Opportunities for IMCO Industries and ICL Israel
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between IMCO and ICL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding IMCO Industries 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 IMCO Industries 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 IMCO Industries 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 IMCO Industries i.e., IMCO Industries and ICL Israel go up and down completely randomly.
Pair Corralation between IMCO Industries and ICL Israel
Assuming the 90 days trading horizon IMCO Industries is expected to generate 2.02 times more return on investment than ICL Israel. However, IMCO Industries is 2.02 times more volatile than ICL Israel Chemicals. It trades about 0.07 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about -0.29 per unit of risk. If you would invest 259,900 in IMCO Industries on January 26, 2024 and sell it today you would earn a total of 9,200 from holding IMCO Industries or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMCO Industries vs. ICL Israel Chemicals
Performance |
| Timeline |
| IMCO Industries |
| ICL Israel Chemicals |
IMCO Industries and ICL Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMCO Industries and ICL Israel
The main advantage of trading using opposite IMCO Industries and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMCO Industries 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.| IMCO Industries vs. Alony Hetz Properties | IMCO Industries vs. Melisron | IMCO Industries vs. Shufersal | IMCO Industries vs. Israel Discount Bank |
| ICL Israel vs. Neto ME Holdings | ICL Israel vs. Aryt Industries | ICL Israel vs. Kerur Holdings | ICL Israel vs. Globrands Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |