Correlation Between B Communications and Abra Information
Can any of the company-specific risk be diversified away by investing in both B Communications and Abra Information 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 B Communications and Abra Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Abra Information Technologies, you can compare the effects of market volatilities on B Communications and Abra Information 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 B Communications with a short position of Abra Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Abra Information.
Diversification Opportunities for B Communications and Abra Information
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BCOM and Abra is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Abra Information Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abra Information Tec and B Communications 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 B Communications are associated (or correlated) with Abra Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abra Information Tec has no effect on the direction of B Communications i.e., B Communications and Abra Information go up and down completely randomly.
Pair Corralation between B Communications and Abra Information
Assuming the 90 days trading horizon B Communications is expected to generate 1.41 times more return on investment than Abra Information. However, B Communications is 1.41 times more volatile than Abra Information Technologies. It trades about 0.2 of its potential returns per unit of risk. Abra Information Technologies is currently generating about 0.18 per unit of risk. If you would invest 176,000 in B Communications on November 3, 2024 and sell it today you would earn a total of 15,600 from holding B Communications or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Abra Information Technologies
Performance |
| Timeline |
| B Communications |
| Abra Information Tec |
B Communications and Abra Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Abra Information
The main advantage of trading using opposite B Communications and Abra Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Abra Information 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 Abra Information will offset losses from the drop in Abra Information's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Abra Information vs. G Willi Food International | Abra Information vs. Menif Financial Services | Abra Information vs. Suny Cellular Communication | Abra Information vs. Scope Metals 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.
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