Correlation Between Bezeq Israeli and Analyst IMS

Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Analyst IMS 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 Bezeq Israeli and Analyst IMS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bezeq Israeli Telecommunication and Analyst IMS Investment, you can compare the effects of market volatilities on Bezeq Israeli and Analyst IMS 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 Bezeq Israeli with a short position of Analyst IMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Analyst IMS.

Diversification Opportunities for Bezeq Israeli and Analyst IMS

0.9

Correlation Coefficient

Bezeq Israeli  Analyst IMS

Almost no diversification

The 3 months correlation between Bezeq and Analyst is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Analyst IMS Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analyst IMS Investment and Bezeq Israeli 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 Bezeq Israeli Telecommunication are associated (or correlated) with Analyst IMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analyst IMS Investment has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Analyst IMS go up and down completely randomly.

Pair Corralation between Bezeq Israeli and Analyst IMS

Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 2.86 times less return on investment than Analyst IMS. But when comparing it to its historical volatility, Bezeq Israeli Telecommunication is 1.27 times less risky than Analyst IMS. It trades about 0.25 of its potential returns per unit of risk. Analyst IMS Investment is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  603,500  in Analyst IMS Investment on December 2, 2024 and sell it today you would earn a total of  254,300  from holding Analyst IMS Investment or generate 42.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Bezeq Israeli Telecommunicatio  vs.  Analyst IMS Investment

Bezeq Israeli Teleco

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bezeq Israeli Telecommunication are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bezeq Israeli sustained solid returns over the last few months and may actually be approaching a breakup point.

Analyst IMS Investment

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Analyst IMS Investment are ranked lower than 48 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Analyst IMS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bezeq Israeli and Analyst IMS

The main advantage of trading using opposite Bezeq Israeli and Analyst IMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Analyst IMS 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 Analyst IMS will offset losses from the drop in Analyst IMS's long position.

The idea behind Bezeq Israeli Telecommunication and Analyst IMS Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.