Correlation Between ICL Israel and Argo Living

Can any of the company-specific risk be diversified away by investing in both ICL Israel and Argo Living 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 Argo Living 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 Argo Living Soils, you can compare the effects of market volatilities on ICL Israel and Argo Living 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 Argo Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICL Israel and Argo Living.

Diversification Opportunities for ICL Israel and Argo Living

0.47

Correlation Coefficient

ICL Israel  Argo Living

Very weak diversification

The 3 months correlation between ICL and Argo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ICL Israel Chemicals and Argo Living Soils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Living Soils 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 Argo Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Living Soils has no effect on the direction of ICL Israel i.e., ICL Israel and Argo Living go up and down completely randomly.

Pair Corralation between ICL Israel and Argo Living

Considering the 90-day investment horizon ICL Israel is expected to generate 15.82 times less return on investment than Argo Living. But when comparing it to its historical volatility, ICL Israel Chemicals is 3.24 times less risky than Argo Living. It trades about 0.03 of its potential returns per unit of risk. Argo Living Soils is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Argo Living Soils on April 30, 2025 and sell it today you would earn a total of  19.00  from holding Argo Living Soils or generate 55.88% return on investment over 90 days.

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

ICL Israel Chemicals  vs.  Argo Living Soils

ICL Israel Chemicals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICL Israel Chemicals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, ICL Israel is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Argo Living Soils

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Living Soils are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Argo Living reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICL Israel and Argo Living

The main advantage of trading using opposite ICL Israel and Argo Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICL Israel position performs unexpectedly, Argo Living 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 Argo Living will offset losses from the drop in Argo Living's long position.

The idea behind ICL Israel Chemicals and Argo Living Soils 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.