Correlation Between B Communications and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both B Communications and Batm Advanced 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 Batm Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Batm Advanced Communications, you can compare the effects of market volatilities on B Communications and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Batm Advanced.
Diversification Opportunities for B Communications and Batm Advanced
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BCOM and Batm is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of B Communications i.e., B Communications and Batm Advanced go up and down completely randomly.
Pair Corralation between B Communications and Batm Advanced
Assuming the 90 days trading horizon B Communications is expected to generate 2.16 times more return on investment than Batm Advanced. However, B Communications is 2.16 times more volatile than Batm Advanced Communications. It trades about 0.42 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.04 per unit of risk. If you would invest 130,000 in B Communications on August 28, 2024 and sell it today you would earn a total of 39,800 from holding B Communications or generate 30.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Batm Advanced Communications
Performance |
| Timeline |
| B Communications |
| Batm Advanced Commun |
B Communications and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Batm Advanced
The main advantage of trading using opposite B Communications and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Batm Advanced vs. MediPress Health Limited Partnership | Batm Advanced vs. Gamatronic Electronic Industries | Batm Advanced vs. Suny Cellular Communication | Batm Advanced vs. Bezeq Israeli Telecommunication |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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