Correlation Between Bezeq Israeli and Aquarius Engines
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Aquarius Engines 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 Aquarius Engines 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 Aquarius Engines AM, you can compare the effects of market volatilities on Bezeq Israeli and Aquarius Engines 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 Aquarius Engines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Aquarius Engines.
Diversification Opportunities for Bezeq Israeli and Aquarius Engines
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bezeq and Aquarius is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Aquarius Engines AM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquarius Engines 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 Aquarius Engines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquarius Engines has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Aquarius Engines go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Aquarius Engines
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.26 times more return on investment than Aquarius Engines. However, Bezeq Israeli Telecommunication is 3.88 times less risky than Aquarius Engines. It trades about 0.01 of its potential returns per unit of risk. Aquarius Engines AM is currently generating about -0.02 per unit of risk. If you would invest 53,555 in Bezeq Israeli Telecommunication on August 28, 2024 and sell it today you would lose (915.00) from holding Bezeq Israeli Telecommunication or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Aquarius Engines AM
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Aquarius Engines |
Bezeq Israeli and Aquarius Engines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Aquarius Engines
The main advantage of trading using opposite Bezeq Israeli and Aquarius Engines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Aquarius Engines 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 Aquarius Engines will offset losses from the drop in Aquarius Engines' 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 |
| Aquarius Engines vs. Brainsway | Aquarius Engines vs. Mivne Real Estate | Aquarius Engines vs. Photomyne | Aquarius Engines vs. Bezeq Israeli Telecommunication |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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