Correlation Between Telenor ASA and Bezeq Corp
Can any of the company-specific risk be diversified away by investing in both Telenor ASA and Bezeq Corp 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 Telenor ASA and Bezeq Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telenor ASA ADR and Bezeq Corp, you can compare the effects of market volatilities on Telenor ASA and Bezeq Corp 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 Telenor ASA with a short position of Bezeq Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telenor ASA and Bezeq Corp.
Diversification Opportunities for Telenor ASA and Bezeq Corp
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telenor and Bezeq is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Telenor ASA ADR and Bezeq Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bezeq Corp and Telenor ASA 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 Telenor ASA ADR are associated (or correlated) with Bezeq Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bezeq Corp has no effect on the direction of Telenor ASA i.e., Telenor ASA and Bezeq Corp go up and down completely randomly.
Pair Corralation between Telenor ASA and Bezeq Corp
Assuming the 90 days horizon Telenor ASA is expected to generate 2.72 times less return on investment than Bezeq Corp. But when comparing it to its historical volatility, Telenor ASA ADR is 3.23 times less risky than Bezeq Corp. It trades about 0.05 of its potential returns per unit of risk. Bezeq Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Bezeq Corp on October 22, 2024 and sell it today you would earn a total of 103.00 from holding Bezeq Corp or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 84.14% |
| Values | Daily Returns |
Telenor ASA ADR vs. Bezeq Corp
Performance |
| Timeline |
| Telenor ASA ADR |
| Bezeq Corp |
Telenor ASA and Bezeq Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telenor ASA and Bezeq Corp
The main advantage of trading using opposite Telenor ASA and Bezeq Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telenor ASA position performs unexpectedly, Bezeq Corp 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 Corp will offset losses from the drop in Bezeq Corp's long position.| Telenor ASA vs. PCCW Limited | Telenor ASA vs. Hellenic Telecommunications Org | Telenor ASA vs. Telefonica SA ADR | Telenor ASA vs. XL Axiata Tbk |
| Bezeq Corp vs. Verizon Communications | Bezeq Corp vs. ATT Inc | Bezeq Corp vs. Comcast Corp | Bezeq Corp vs. Deutsche Telekom AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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