Correlation Between Bezeq Israeli and Gencell

Can any of the company-specific risk be diversified away by investing in both Bezeq Israeli and Gencell 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 Gencell 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 Gencell, you can compare the effects of market volatilities on Bezeq Israeli and Gencell 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 Gencell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bezeq Israeli and Gencell.

Diversification Opportunities for Bezeq Israeli and Gencell

-0.27

Correlation Coefficient

Bezeq Israeli  Gencell

Very good diversification

The 3 months correlation between Bezeq and Gencell is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Gencell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencell 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 Gencell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencell has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Gencell go up and down completely randomly.

Pair Corralation between Bezeq Israeli and Gencell

Assuming the 90 days trading horizon Bezeq Israeli Telecommunication is expected to generate 0.38 times more return on investment than Gencell. However, Bezeq Israeli Telecommunication is 2.61 times less risky than Gencell. It trades about 0.07 of its potential returns per unit of risk. Gencell is currently generating about -0.18 per unit of risk. If you would invest  51,380  in Bezeq Israeli Telecommunication on December 28, 2024 and sell it today you would earn a total of  3,120  from holding Bezeq Israeli Telecommunication or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bezeq Israeli Telecommunicatio  vs.  Gencell

Bezeq Israeli Teleco

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bezeq Israeli Telecommunication are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bezeq Israeli may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gencell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gencell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bezeq Israeli and Gencell

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

The idea behind Bezeq Israeli Telecommunication and Gencell 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.