Correlation Between B Communications and Sella Real
Can any of the company-specific risk be diversified away by investing in both B Communications and Sella Real 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 B Communications and Sella Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Sella Real Estate, you can compare the effects of market volatilities on B Communications and Sella Real 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 B Communications with a short position of Sella Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Sella Real.
Diversification Opportunities for B Communications and Sella Real
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BCOM and Sella is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Sella Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sella Real Estate and B Communications 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 B Communications are associated (or correlated) with Sella Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sella Real Estate has no effect on the direction of B Communications i.e., B Communications and Sella Real go up and down completely randomly.
Pair Corralation between B Communications and Sella Real
Assuming the 90 days trading horizon B Communications is expected to generate 1.41 times more return on investment than Sella Real. However, B Communications is 1.41 times more volatile than Sella Real Estate. It trades about 0.16 of its potential returns per unit of risk. Sella Real Estate is currently generating about -0.02 per unit of risk. If you would invest 171,100 in B Communications on December 2, 2024 and sell it today you would earn a total of 28,900 from holding B Communications or generate 16.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
B Communications vs. Sella Real Estate
Performance |
Timeline |
B Communications |
Sella Real Estate |
B Communications and Sella Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with B Communications and Sella Real
The main advantage of trading using opposite B Communications and Sella Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Sella Real 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 Sella Real will offset losses from the drop in Sella Real's long position.B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
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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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