Correlation Between IBI Inv and B Communications
Can any of the company-specific risk be diversified away by investing in both IBI Inv and B Communications 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 IBI Inv and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBI Inv House and B Communications, you can compare the effects of market volatilities on IBI Inv and B Communications 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 IBI Inv with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBI Inv and B Communications.
Diversification Opportunities for IBI Inv and B Communications
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IBI and BCOM is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding IBI Inv House and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and IBI Inv 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 IBI Inv House are associated (or correlated) with B Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Communications has no effect on the direction of IBI Inv i.e., IBI Inv and B Communications go up and down completely randomly.
Pair Corralation between IBI Inv and B Communications
Assuming the 90 days trading horizon IBI Inv House is expected to generate 0.78 times more return on investment than B Communications. However, IBI Inv House is 1.29 times less risky than B Communications. It trades about 0.11 of its potential returns per unit of risk. B Communications is currently generating about 0.07 per unit of risk. If you would invest 843,502 in IBI Inv House on August 31, 2024 and sell it today you would earn a total of 745,498 from holding IBI Inv House or generate 88.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
IBI Inv House vs. B Communications
Performance |
| Timeline |
| IBI Inv House |
| B Communications |
IBI Inv and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBI Inv and B Communications
The main advantage of trading using opposite IBI Inv and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBI Inv position performs unexpectedly, B Communications 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 B Communications will offset losses from the drop in B Communications' long position.| IBI Inv vs. Opko Health | IBI Inv vs. Computer Direct | IBI Inv vs. Bio Meat Foodtech | IBI Inv vs. B Communications |
| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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