Correlation Between B Communications and Qualitau
Can any of the company-specific risk be diversified away by investing in both B Communications and Qualitau 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 Qualitau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Qualitau, you can compare the effects of market volatilities on B Communications and Qualitau 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 Qualitau. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Qualitau.
Diversification Opportunities for B Communications and Qualitau
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BCOM and Qualitau is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Qualitau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualitau 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 Qualitau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualitau has no effect on the direction of B Communications i.e., B Communications and Qualitau go up and down completely randomly.
Pair Corralation between B Communications and Qualitau
Assuming the 90 days trading horizon B Communications is expected to generate 2.05 times less return on investment than Qualitau. But when comparing it to its historical volatility, B Communications is 1.28 times less risky than Qualitau. It trades about 0.35 of its potential returns per unit of risk. Qualitau is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 1,999,000 in Qualitau on October 21, 2024 and sell it today you would earn a total of 662,000 from holding Qualitau or generate 33.12% 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. Qualitau
Performance |
| Timeline |
| B Communications |
| Qualitau |
B Communications and Qualitau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Qualitau
The main advantage of trading using opposite B Communications and Qualitau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Qualitau 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 Qualitau will offset losses from the drop in Qualitau's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Qualitau vs. Telsys | Qualitau vs. Automatic Bank Services | Qualitau vs. Rapac Communication Infrastructure | Qualitau vs. Ralco Agencies |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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