Correlation Between B Communications and Bram Indus
Can any of the company-specific risk be diversified away by investing in both B Communications and Bram Indus 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 Bram Indus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Bram Indus, you can compare the effects of market volatilities on B Communications and Bram Indus 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 Bram Indus. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Bram Indus.
Diversification Opportunities for B Communications and Bram Indus
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BCOM and Bram is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Bram Indus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bram Indus 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 Bram Indus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bram Indus has no effect on the direction of B Communications i.e., B Communications and Bram Indus go up and down completely randomly.
Pair Corralation between B Communications and Bram Indus
Assuming the 90 days trading horizon B Communications is expected to generate 0.76 times more return on investment than Bram Indus. However, B Communications is 1.32 times less risky than Bram Indus. It trades about 0.33 of its potential returns per unit of risk. Bram Indus is currently generating about 0.02 per unit of risk. If you would invest 118,000 in B Communications on October 24, 2024 and sell it today you would earn a total of 82,900 from holding B Communications or generate 70.25% 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. Bram Indus
Performance |
| Timeline |
| B Communications |
| Bram Indus |
B Communications and Bram Indus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Bram Indus
The main advantage of trading using opposite B Communications and Bram Indus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Bram Indus 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 Bram Indus will offset losses from the drop in Bram Indus' long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Bram Indus vs. Seach Medical Group | Bram Indus vs. Scope Metals Group | Bram Indus vs. B Communications | Bram Indus vs. Clal Biotechnology Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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