Correlation Between Deutsche Telekom and Bezeq Israel
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Bezeq Israel 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 Deutsche Telekom and Bezeq Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Telekom AG and Bezeq The Israel, you can compare the effects of market volatilities on Deutsche Telekom and Bezeq Israel 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 Deutsche Telekom with a short position of Bezeq Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Bezeq Israel.
Diversification Opportunities for Deutsche Telekom and Bezeq Israel
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Bezeq is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Bezeq The Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bezeq The Israel and Deutsche Telekom 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 Deutsche Telekom AG are associated (or correlated) with Bezeq Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bezeq The Israel has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Bezeq Israel go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Bezeq Israel
Assuming the 90 days horizon Deutsche Telekom is expected to generate 6.49 times less return on investment than Bezeq Israel. But when comparing it to its historical volatility, Deutsche Telekom AG is 4.64 times less risky than Bezeq Israel. It trades about 0.06 of its potential returns per unit of risk. Bezeq The Israel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Bezeq The Israel on November 19, 2024 and sell it today you would earn a total of 29.00 from holding Bezeq The Israel or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 10.11% |
| Values | Daily Returns |
Deutsche Telekom AG vs. Bezeq The Israel
Performance |
| Timeline |
| Deutsche Telekom |
| Bezeq The Israel |
Deutsche Telekom and Bezeq Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Bezeq Israel
The main advantage of trading using opposite Deutsche Telekom and Bezeq Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Bezeq Israel 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 Bezeq Israel will offset losses from the drop in Bezeq Israel's long position.| Deutsche Telekom vs. KT Corporation | Deutsche Telekom vs. Telkom Indonesia Tbk | Deutsche Telekom vs. SK Telecom Co | Deutsche Telekom vs. PLDT Inc ADR |
| Bezeq Israel vs. KT Corporation | Bezeq Israel vs. Cable One | Bezeq Israel vs. Millicom International Cellular | Bezeq Israel vs. Liberty Latin America |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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