Correlation Between Bezeq Israeli and Shikun Binui
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Shikun Binui 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 Shikun Binui 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 Shikun Binui, you can compare the effects of market volatilities on Bezeq Israeli and Shikun Binui 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 Shikun Binui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Shikun Binui.
Diversification Opportunities for Bezeq Israeli and Shikun Binui
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bezeq and Shikun is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Shikun Binui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shikun Binui 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 Shikun Binui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shikun Binui has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Shikun Binui go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Shikun Binui
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.32 times less return on investment than Shikun Binui. In addition to that, Bezeq Israeli is 1.15 times more volatile than Shikun Binui. It trades about 0.48 of its total potential returns per unit of risk. Shikun Binui is currently generating about 0.72 per unit of volatility. If you would invest 91,300 in Shikun Binui on August 25, 2024 and sell it today you would earn a total of 16,400 from holding Shikun Binui or generate 17.96% 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. Shikun Binui
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Shikun Binui |
Bezeq Israeli and Shikun Binui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Shikun Binui
The main advantage of trading using opposite Bezeq Israeli and Shikun Binui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Shikun Binui 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 Shikun Binui will offset losses from the drop in Shikun Binui'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 |
| Shikun Binui vs. Israel Discount Bank | Shikun Binui vs. Bezeq Israeli Telecommunication | Shikun Binui vs. Azrieli Group | Shikun Binui vs. Bank Hapoalim |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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