Correlation Between Multi Retail and B Communications
Can any of the company-specific risk be diversified away by investing in both Multi Retail 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 Multi Retail and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and B Communications, you can compare the effects of market volatilities on Multi Retail 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 Multi Retail with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and B Communications.
Diversification Opportunities for Multi Retail and B Communications
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and BCOM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Multi Retail 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 Multi Retail Group 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 Multi Retail i.e., Multi Retail and B Communications go up and down completely randomly.
Pair Corralation between Multi Retail and B Communications
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 1.65 times more return on investment than B Communications. However, Multi Retail is 1.65 times more volatile than B Communications. It trades about 0.24 of its potential returns per unit of risk. B Communications is currently generating about 0.06 per unit of risk. If you would invest 30,390 in Multi Retail Group on August 27, 2024 and sell it today you would earn a total of 81,710 from holding Multi Retail Group or generate 268.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. B Communications
Performance |
| Timeline |
| Multi Retail Group |
| B Communications |
Multi Retail and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and B Communications
The main advantage of trading using opposite Multi Retail and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail 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.| Multi Retail vs. Ormat Technologies | Multi Retail vs. B Communications | Multi Retail vs. Technoplus Ventures | Multi Retail vs. Batm Advanced 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |