Correlation Between Bezeq Israel and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Bezeq Israel and Vodafone Group 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 Israel and Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bezeq The Israel and Vodafone Group PLC, you can compare the effects of market volatilities on Bezeq Israel and Vodafone Group 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 Israel with a short position of Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israel and Vodafone Group.
Diversification Opportunities for Bezeq Israel and Vodafone Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bezeq and Vodafone is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq The Israel and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC and Bezeq Israel 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 The Israel are associated (or correlated) with Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Bezeq Israel i.e., Bezeq Israel and Vodafone Group go up and down completely randomly.
Pair Corralation between Bezeq Israel and Vodafone Group
Assuming the 90 days horizon Bezeq The Israel is expected to under-perform the Vodafone Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bezeq The Israel is 1.8 times less risky than Vodafone Group. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Vodafone Group PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 84.00 in Vodafone Group PLC on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Vodafone Group PLC or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.61% |
| Values | Daily Returns |
Bezeq The Israel vs. Vodafone Group PLC
Performance |
| Timeline |
| Bezeq The Israel |
| Vodafone Group PLC |
Bezeq Israel and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bezeq Israel and Vodafone Group
The main advantage of trading using opposite Bezeq Israel and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israel position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Bezeq Israel vs. Vodafone Group PLC | Bezeq Israel vs. KDDI Corp | Bezeq Israel vs. Amrica Mvil, SAB | Bezeq Israel vs. Singapore Telecommunications Limited |
| Vodafone Group vs. KDDI Corp | Vodafone Group vs. Amrica Mvil, SAB | Vodafone Group vs. Singapore Telecommunications Limited | Vodafone Group vs. ATT Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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