Correlation Between B Communications and Polyram Plastic
Can any of the company-specific risk be diversified away by investing in both B Communications and Polyram Plastic 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 Polyram Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Polyram Plastic Industries, you can compare the effects of market volatilities on B Communications and Polyram Plastic 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 Polyram Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Polyram Plastic.
Diversification Opportunities for B Communications and Polyram Plastic
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BCOM and Polyram is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Polyram Plastic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyram Plastic Indu 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 Polyram Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyram Plastic Indu has no effect on the direction of B Communications i.e., B Communications and Polyram Plastic go up and down completely randomly.
Pair Corralation between B Communications and Polyram Plastic
Assuming the 90 days trading horizon B Communications is expected to generate 1.66 times more return on investment than Polyram Plastic. However, B Communications is 1.66 times more volatile than Polyram Plastic Industries. It trades about 0.16 of its potential returns per unit of risk. Polyram Plastic Industries is currently generating about 0.08 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Polyram Plastic Industries
Performance |
| Timeline |
| B Communications |
| Polyram Plastic Indu |
B Communications and Polyram Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Polyram Plastic
The main advantage of trading using opposite B Communications and Polyram Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Polyram Plastic 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 Polyram Plastic will offset losses from the drop in Polyram Plastic's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Polyram Plastic vs. Ormat Technologies | Polyram Plastic vs. Iargento Hi Tech | Polyram Plastic vs. Amot Investments | Polyram Plastic vs. YD More Investments |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |