Correlation Between Bezeq Israeli and Direct Capital
Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Direct Capital 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 Direct Capital 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 Direct Capital Investments, you can compare the effects of market volatilities on Bezeq Israeli and Direct Capital 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 Direct Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Direct Capital.
Diversification Opportunities for Bezeq Israeli and Direct Capital
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bezeq and Direct is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Direct Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Capital Inves 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 Direct Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Capital Inves has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Direct Capital go up and down completely randomly.
Pair Corralation between Bezeq Israeli and Direct Capital
Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.18 times more return on investment than Direct Capital. However, Bezeq Israeli Telecommunication is 5.55 times less risky than Direct Capital. It trades about 0.38 of its potential returns per unit of risk. Direct Capital Investments is currently generating about -0.07 per unit of risk. If you would invest 40,399 in Bezeq Israeli Telecommunication on September 14, 2024 and sell it today you would earn a total of 12,901 from holding Bezeq Israeli Telecommunication or generate 31.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bezeq Israeli Telecommunicatio vs. Direct Capital Investments
Performance |
Timeline |
Bezeq Israeli Teleco |
Direct Capital Inves |
Bezeq Israeli and Direct Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bezeq Israeli and Direct Capital
The main advantage of trading using opposite Bezeq Israeli and Direct Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bezeq Israeli position performs unexpectedly, Direct Capital 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 Direct Capital will offset losses from the drop in Direct Capital's long position.Bezeq Israeli 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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