Correlation Between B Communications and Opal Balance
Can any of the company-specific risk be diversified away by investing in both B Communications and Opal Balance 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 Opal Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Opal Balance, you can compare the effects of market volatilities on B Communications and Opal Balance 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 Opal Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Opal Balance.
Diversification Opportunities for B Communications and Opal Balance
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BCOM and Opal is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Opal Balance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opal Balance 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 Opal Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opal Balance has no effect on the direction of B Communications i.e., B Communications and Opal Balance go up and down completely randomly.
Pair Corralation between B Communications and Opal Balance
Assuming the 90 days trading horizon B Communications is expected to generate 1.4 times more return on investment than Opal Balance. However, B Communications is 1.4 times more volatile than Opal Balance. It trades about 0.35 of its potential returns per unit of risk. Opal Balance is currently generating about 0.33 per unit of risk. If you would invest 170,500 in B Communications on October 21, 2024 and sell it today you would earn a total of 25,400 from holding B Communications or generate 14.9% 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. Opal Balance
Performance |
| Timeline |
| B Communications |
| Opal Balance |
B Communications and Opal Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Opal Balance
The main advantage of trading using opposite B Communications and Opal Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Opal Balance 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 Opal Balance will offset losses from the drop in Opal Balance's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Opal Balance vs. SR Accord | Opal Balance vs. Rapac Communication Infrastructure | Opal Balance vs. Nextcom | Opal Balance vs. EN Shoham Business |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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