Correlation Between Bezeq Israeli and Kvutzat Acro
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Kvutzat Acro 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 Bezeq Israeli and Kvutzat Acro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bezeq Israeli Telecommunication and Kvutzat Acro, you can compare the effects of market volatilities on Bezeq Israeli and Kvutzat Acro 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 Bezeq Israeli with a short position of Kvutzat Acro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Kvutzat Acro.
Diversification Opportunities for Bezeq Israeli and Kvutzat Acro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bezeq and Kvutzat is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Kvutzat Acro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvutzat Acro and Bezeq Israeli 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 Bezeq Israeli Telecommunication are associated (or correlated) with Kvutzat Acro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvutzat Acro has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Kvutzat Acro go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Kvutzat Acro
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 2.9 times less return on investment than Kvutzat Acro. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.86 times less risky than Kvutzat Acro. It trades about 0.06 of its potential returns per unit of risk. Kvutzat Acro is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 361,443 in Kvutzat Acro on September 4, 2024 and sell it today you would earn a total of 195,757 from holding Kvutzat Acro or generate 54.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Kvutzat Acro
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Kvutzat Acro |
Bezeq Israeli and Kvutzat Acro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Kvutzat Acro
The main advantage of trading using opposite Bezeq Israeli and Kvutzat Acro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Kvutzat Acro 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 Kvutzat Acro will offset losses from the drop in Kvutzat Acro's long position.| Bezeq Israeli vs. Bank Leumi Le Israel | Bezeq Israeli vs. Teva Pharmaceutical Industries | Bezeq Israeli vs. Bank Hapoalim | Bezeq Israeli vs. Elbit Systems |
| Kvutzat Acro vs. Bezeq Israeli Telecommunication | Kvutzat Acro vs. Magic Software Enterprises | Kvutzat Acro vs. Silver Castle Holdings | Kvutzat Acro vs. Clal Biotechnology Industries |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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