Correlation Between Bezeq Israeli and Electra Co
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Electra Co 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 Electra Co 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 Electra Co Pr, you can compare the effects of market volatilities on Bezeq Israeli and Electra Co 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 Electra Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Electra Co.
Diversification Opportunities for Bezeq Israeli and Electra Co
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bezeq and Electra is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Electra Co Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Co Pr 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 Electra Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Co Pr has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Electra Co go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Electra Co
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.55 times more return on investment than Electra Co. However, Bezeq Israeli Telecommunication is 1.82 times less risky than Electra Co. It trades about 0.02 of its potential returns per unit of risk. Electra Co Pr is currently generating about 0.0 per unit of risk. If you would invest 48,395 in Bezeq Israeli Telecommunication on September 1, 2024 and sell it today you would earn a total of 3,745 from holding Bezeq Israeli Telecommunication or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Electra Co Pr
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Electra Co Pr |
Bezeq Israeli and Electra Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Electra Co
The main advantage of trading using opposite Bezeq Israeli and Electra Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Electra Co 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 Electra Co will offset losses from the drop in Electra Co'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 |
| Electra Co vs. El Al Israel | Electra Co vs. Magic Software Enterprises | Electra Co vs. Neto Malinda | Electra Co vs. Orbit 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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