Correlation Between Gibui Holdings and ICL Israel

Can any of the company-specific risk be diversified away by investing in both Gibui Holdings 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 Gibui Holdings and ICL Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gibui Holdings and ICL Israel Chemicals, you can compare the effects of market volatilities on Gibui Holdings 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 Gibui Holdings with a short position of ICL Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gibui Holdings and ICL Israel.

Diversification Opportunities for Gibui Holdings and ICL Israel

0.09

Correlation Coefficient

Gibui Holdings  ICL Israel

Significant diversification

The 3 months correlation between Gibui and ICL is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gibui Holdings 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 Gibui Holdings 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 Gibui Holdings 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 Gibui Holdings i.e., Gibui Holdings and ICL Israel go up and down completely randomly.

Pair Corralation between Gibui Holdings and ICL Israel

Assuming the 90 days trading horizon Gibui Holdings is expected to generate 0.07 times more return on investment than ICL Israel. However, Gibui Holdings is 14.38 times less risky than ICL Israel. It trades about 0.0 of its potential returns per unit of risk. ICL Israel Chemicals is currently generating about -0.04 per unit of risk. If you would invest  7,630  in Gibui Holdings on January 19, 2024 and sell it today you would earn a total of  0.00  from holding Gibui Holdings or generate 0.0% return on investment over 90 days.

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

Gibui Holdings  vs.  ICL Israel Chemicals

Gibui Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gibui Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Gibui Holdings is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ICL Israel Chemicals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICL Israel Chemicals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, ICL Israel may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Gibui Holdings and ICL Israel

The main advantage of trading using opposite Gibui Holdings and ICL Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gibui Holdings 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.

The idea behind Gibui Holdings and ICL Israel Chemicals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.