Correlation Between Bezeq Israeli and Value Capital
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Value Capital 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 Value Capital 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 Value Capital One, you can compare the effects of market volatilities on Bezeq Israeli and Value Capital 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 Value Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Value Capital.
Diversification Opportunities for Bezeq Israeli and Value Capital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bezeq and Value is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Value Capital One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Capital One 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 Value Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Capital One has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Value Capital go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Value Capital
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to under-perform the Value Capital. But the stock apears to be less risky and, when comparing its historical volatility, Bezeq Israeli Telecommunication is 1.74 times less risky than Value Capital. The stock trades about -0.21 of its potential returns per unit of risk. The Value Capital One is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,410 in Value Capital One on January 13, 2025 and sell it today you would earn a total of 250.00 from holding Value Capital One or generate 7.33% 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. Value Capital One
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Value Capital One |
Bezeq Israeli and Value Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Value Capital
The main advantage of trading using opposite Bezeq Israeli and Value Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Value Capital 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 Value Capital will offset losses from the drop in Value Capital'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 |
| Value Capital vs. Altshuler Shaham Financial | Value Capital vs. Rimon Consulting Management | Value Capital vs. Computer Direct | Value Capital vs. First International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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