Correlation Between Bezeq Israeli and Electra
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Electra 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 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, you can compare the effects of market volatilities on Bezeq Israeli and Electra 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Electra.
Diversification Opportunities for Bezeq Israeli and Electra
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bezeq and Electra is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Electra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Electra go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Electra
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.69 times more return on investment than Electra. However, Bezeq Israeli Telecommunication is 1.44 times less risky than Electra. It trades about 0.05 of its potential returns per unit of risk. Electra is currently generating about 0.03 per unit of risk. If you would invest 42,506 in Bezeq Israeli Telecommunication on September 2, 2024 and sell it today you would earn a total of 9,634 from holding Bezeq Israeli Telecommunication or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Electra
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Electra |
Bezeq Israeli and Electra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Electra
The main advantage of trading using opposite Bezeq Israeli and Electra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Electra 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 will offset losses from the drop in Electra's long position.| Bezeq Israeli vs. Israel China Biotechnology | Bezeq Israeli vs. The Gold Bond | Bezeq Israeli vs. Overseas Commerce | Bezeq Israeli vs. Big Tech 50 |
| Electra vs. Alony Hetz Properties | Electra vs. Melisron | Electra vs. Shufersal | Electra vs. Israel Discount Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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