Correlation Between B Communications and Matrix
Can any of the company-specific risk be diversified away by investing in both B Communications and Matrix 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 Matrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Matrix, you can compare the effects of market volatilities on B Communications and Matrix 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 Matrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Matrix.
Diversification Opportunities for B Communications and Matrix
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BCOM and Matrix is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix 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 Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of B Communications i.e., B Communications and Matrix go up and down completely randomly.
Pair Corralation between B Communications and Matrix
Assuming the 90 days trading horizon B Communications is expected to generate 0.99 times more return on investment than Matrix. However, B Communications is 1.01 times less risky than Matrix. It trades about 0.16 of its potential returns per unit of risk. Matrix is currently generating about 0.15 per unit of risk. If you would invest 188,000 in B Communications on November 27, 2024 and sell it today you would earn a total of 8,200 from holding B Communications or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Matrix
Performance |
| Timeline |
| B Communications |
| Matrix |
B Communications and Matrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Matrix
The main advantage of trading using opposite B Communications and Matrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Matrix 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 Matrix will offset losses from the drop in Matrix's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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