Correlation Between Bezeq Israeli and Terminal X
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Terminal X 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 Terminal X 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 Terminal X Online, you can compare the effects of market volatilities on Bezeq Israeli and Terminal X 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 Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Terminal X.
Diversification Opportunities for Bezeq Israeli and Terminal X
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bezeq and Terminal is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online 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 Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Terminal X go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Terminal X
Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.07 times less return on investment than Terminal X. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.14 times less risky than Terminal X. It trades about 0.52 of its potential returns per unit of risk. Terminal X Online is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 37,900 in Terminal X Online on August 29, 2024 and sell it today you would earn a total of 6,040 from holding Terminal X Online or generate 15.94% 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. Terminal X Online
Performance |
| Timeline |
| Bezeq Israeli Teleco |
| Terminal X Online |
Bezeq Israeli and Terminal X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israeli and Terminal X
The main advantage of trading using opposite Bezeq Israeli and Terminal X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Terminal X 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 Terminal X will offset losses from the drop in Terminal X'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 |
| Terminal X vs. Fox Wizel | Terminal X vs. Retailors | Terminal X vs. Delek Group | Terminal X vs. Holmes Place International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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