Correlation Between Bezeq Israeli and Netz Hotels
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Netz Hotels 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 Netz Hotels 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 Netz Hotels, you can compare the effects of market volatilities on Bezeq Israeli and Netz Hotels 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 Netz Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Netz Hotels.
Diversification Opportunities for Bezeq Israeli and Netz Hotels
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bezeq and Netz is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Netz Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netz Hotels 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 Netz Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netz Hotels has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Netz Hotels go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Netz Hotels
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.3 times less return on investment than Netz Hotels. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 2.0 times less risky than Netz Hotels. It trades about 0.48 of its potential returns per unit of risk. Netz Hotels is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Netz Hotels on August 25, 2024 and sell it today you would earn a total of 460.00 from holding Netz Hotels or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Netz Hotels
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Netz Hotels |
Bezeq Israeli and Netz Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Netz Hotels
The main advantage of trading using opposite Bezeq Israeli and Netz Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Netz Hotels 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 Netz Hotels will offset losses from the drop in Netz Hotels' 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 |
| Netz Hotels vs. Direct Capital Investments | Netz Hotels vs. Brainsway | Netz Hotels vs. Mivne Real Estate | Netz Hotels vs. Photomyne |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |