Correlation Between Sofwave Medical and B Communications
Can any of the company-specific risk be diversified away by investing in both Sofwave Medical 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 Sofwave Medical and B Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofwave Medical and B Communications, you can compare the effects of market volatilities on Sofwave Medical 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 Sofwave Medical with a short position of B Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofwave Medical and B Communications.
Diversification Opportunities for Sofwave Medical and B Communications
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sofwave and BCOM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sofwave Medical and B Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Communications and Sofwave Medical 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 Sofwave Medical 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 Sofwave Medical i.e., Sofwave Medical and B Communications go up and down completely randomly.
Pair Corralation between Sofwave Medical and B Communications
Assuming the 90 days trading horizon Sofwave Medical is expected to generate 3.55 times less return on investment than B Communications. In addition to that, Sofwave Medical is 1.5 times more volatile than B Communications. It trades about 0.03 of its total potential returns per unit of risk. B Communications is currently generating about 0.14 per unit of volatility. If you would invest 168,800 in B Communications on September 18, 2024 and sell it today you would earn a total of 8,100 from holding B Communications or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sofwave Medical vs. B Communications
Performance |
| Timeline |
| Sofwave Medical |
| B Communications |
Sofwave Medical and B Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofwave Medical and B Communications
The main advantage of trading using opposite Sofwave Medical and B Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofwave Medical 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.| Sofwave Medical vs. Harel Insurance Investments | Sofwave Medical vs. Shagrir Group Vehicle | Sofwave Medical vs. Rapac Communication Infrastructure | Sofwave Medical vs. Batm Advanced Communications |
| B Communications vs. Tower Semiconductor | B Communications vs. Israel Discount Bank | B Communications vs. Photomyne | B Communications vs. M Yochananof and |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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