Correlation Between B Communications and Wesure Global
Can any of the company-specific risk be diversified away by investing in both B Communications and Wesure Global 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 Wesure Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Wesure Global Tech, you can compare the effects of market volatilities on B Communications and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Wesure Global.
Diversification Opportunities for B Communications and Wesure Global
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BCOM and Wesure is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of B Communications i.e., B Communications and Wesure Global go up and down completely randomly.
Pair Corralation between B Communications and Wesure Global
Assuming the 90 days trading horizon B Communications is expected to generate 0.96 times more return on investment than Wesure Global. However, B Communications is 1.04 times less risky than Wesure Global. It trades about 0.33 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.3 per unit of risk. If you would invest 130,000 in B Communications on October 24, 2024 and sell it today you would earn a total of 70,900 from holding B Communications or generate 54.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Wesure Global Tech
Performance |
| Timeline |
| B Communications |
| Wesure Global Tech |
B Communications and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Wesure Global
The main advantage of trading using opposite B Communications and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Wesure Global vs. Global Knafaim Leasing | Wesure Global vs. IDI Insurance | Wesure Global vs. B Communications | Wesure Global vs. Suny Cellular Communication |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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