Correlation Between Bezeq Israeli and MediPress Health
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and MediPress Health 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 MediPress Health 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 MediPress Health Limited Partnership, you can compare the effects of market volatilities on Bezeq Israeli and MediPress Health 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 MediPress Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and MediPress Health.
Diversification Opportunities for Bezeq Israeli and MediPress Health
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bezeq and MediPress is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim 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 MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and MediPress Health go up and down completely randomly.
Pair Corralation between Bezeq Israeli and MediPress Health
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.81 times less return on investment than MediPress Health. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.45 times less risky than MediPress Health. It trades about 0.3 of its potential returns per unit of risk. MediPress Health Limited Partnership is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 6,660 in MediPress Health Limited Partnership on September 1, 2024 and sell it today you would earn a total of 1,010 from holding MediPress Health Limited Partnership or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. MediPress Health Limited Partn
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| MediPress Health Lim |
Bezeq Israeli and MediPress Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and MediPress Health
The main advantage of trading using opposite Bezeq Israeli and MediPress Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, MediPress Health 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 MediPress Health will offset losses from the drop in MediPress Health'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 |
| MediPress Health vs. Nice | MediPress Health vs. The Gold Bond | MediPress Health vs. Bank Leumi Le Israel | MediPress Health vs. ICL Israel Chemicals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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