Correlation Between B Communications and Nextferm Technologies
Can any of the company-specific risk be diversified away by investing in both B Communications and Nextferm Technologies 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 Nextferm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Nextferm Technologies, you can compare the effects of market volatilities on B Communications and Nextferm Technologies 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 Nextferm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Nextferm Technologies.
Diversification Opportunities for B Communications and Nextferm Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BCOM and Nextferm is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Nextferm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextferm Technologies 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 Nextferm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextferm Technologies has no effect on the direction of B Communications i.e., B Communications and Nextferm Technologies go up and down completely randomly.
Pair Corralation between B Communications and Nextferm Technologies
Assuming the 90 days trading horizon B Communications is expected to generate 0.45 times more return on investment than Nextferm Technologies. However, B Communications is 2.22 times less risky than Nextferm Technologies. It trades about 0.05 of its potential returns per unit of risk. Nextferm Technologies is currently generating about -0.01 per unit of risk. If you would invest 136,600 in B Communications on November 27, 2024 and sell it today you would earn a total of 59,600 from holding B Communications or generate 43.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Nextferm Technologies
Performance |
| Timeline |
| B Communications |
| Nextferm Technologies |
B Communications and Nextferm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Nextferm Technologies
The main advantage of trading using opposite B Communications and Nextferm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Nextferm Technologies 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 Nextferm Technologies will offset losses from the drop in Nextferm Technologies' long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Nextferm Technologies vs. Batm Advanced Communications | Nextferm Technologies vs. Libra Insurance | Nextferm Technologies vs. B Communications | Nextferm Technologies vs. Ram On Investments and |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |