Correlation Between Mobile Max and B Communications
Can any of the company-specific risk be diversified away by investing in both Mobile Max 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 Mobile Max and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Max M and B Communications, you can compare the effects of market volatilities on Mobile Max 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 Mobile Max with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Max and B Communications.
Diversification Opportunities for Mobile Max and B Communications
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mobile and BCOM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Max M and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Mobile Max 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 Mobile Max M 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 Mobile Max i.e., Mobile Max and B Communications go up and down completely randomly.
Pair Corralation between Mobile Max and B Communications
Assuming the 90 days trading horizon Mobile Max M is expected to under-perform the B Communications. But the stock apears to be less risky and, when comparing its historical volatility, Mobile Max M is 1.7 times less risky than B Communications. The stock trades about -0.56 of its potential returns per unit of risk. The B Communications is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 131,200 in B Communications on August 30, 2024 and sell it today you would earn a total of 36,800 from holding B Communications or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Max M vs. B Communications
Performance |
| Timeline |
| Mobile Max M |
| B Communications |
Mobile Max and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Max and B Communications
The main advantage of trading using opposite Mobile Max and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Max 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.| Mobile Max vs. B Communications | Mobile Max vs. Nova | Mobile Max vs. Petrochemical | Mobile Max vs. Israel Opportunity |
| B Communications vs. Tower Semiconductor | B Communications vs. Israel Discount Bank | B Communications vs. Holmes Place International | B Communications vs. Nova |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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