Correlation Between Bezeq Israeli and Human Xtensions
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Human Xtensions 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 Human Xtensions 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 Human Xtensions, you can compare the effects of market volatilities on Bezeq Israeli and Human Xtensions 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 Human Xtensions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Human Xtensions.
Diversification Opportunities for Bezeq Israeli and Human Xtensions
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bezeq and Human is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Human Xtensions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Human Xtensions 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 Human Xtensions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Human Xtensions has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Human Xtensions go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Human Xtensions
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.25 times more return on investment than Human Xtensions. However, Bezeq Israeli Telecommunication is 4.07 times less risky than Human Xtensions. It trades about 0.5 of its potential returns per unit of risk. Human Xtensions is currently generating about -0.15 per unit of risk. If you would invest 45,900 in Bezeq Israeli Telecommunication on August 29, 2024 and sell it today you would earn a total of 6,850 from holding Bezeq Israeli Telecommunication or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Human Xtensions
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Human Xtensions |
Bezeq Israeli and Human Xtensions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Human Xtensions
The main advantage of trading using opposite Bezeq Israeli and Human Xtensions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Human Xtensions 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 Human Xtensions will offset losses from the drop in Human Xtensions' long position.| Bezeq Israeli vs. Tower Semiconductor | Bezeq Israeli vs. Israel Discount Bank | Bezeq Israeli vs. Holmes Place International | Bezeq Israeli vs. Nova |
| Human Xtensions vs. ICL Israel Chemicals | Human Xtensions vs. MEITAV INVESTMENTS HOUSE | Human Xtensions vs. Harel Insurance Investments | Human Xtensions vs. Amot Investments |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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