Correlation Between Bezeq Israeli and Cellcom Israel
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Cellcom Israel 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 Cellcom Israel 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 Cellcom Israel, you can compare the effects of market volatilities on Bezeq Israeli and Cellcom Israel 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 Cellcom Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Cellcom Israel.
Diversification Opportunities for Bezeq Israeli and Cellcom Israel
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bezeq and Cellcom is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Cellcom Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellcom Israel 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 Cellcom Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellcom Israel has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Cellcom Israel go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Cellcom Israel
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.9 times less return on investment than Cellcom Israel. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.47 times less risky than Cellcom Israel. It trades about 0.05 of its potential returns per unit of risk. Cellcom Israel is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 138,000 in Cellcom Israel on August 31, 2024 and sell it today you would earn a total of 57,300 from holding Cellcom Israel or generate 41.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Cellcom Israel
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Cellcom Israel |
Bezeq Israeli and Cellcom Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Cellcom Israel
The main advantage of trading using opposite Bezeq Israeli and Cellcom Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Cellcom Israel 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 Cellcom Israel will offset losses from the drop in Cellcom Israel'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 |
| Cellcom Israel vs. Blender Financial Technologies | Cellcom Israel vs. Automatic Bank Services | Cellcom Israel vs. Bank Leumi Le Israel | Cellcom Israel vs. Payment Financial Technologies |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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