Correlation Between Matrix and Bezeq Israeli

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

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

Diversification Opportunities for Matrix and Bezeq Israeli

0.75

Correlation Coefficient

Matrix  Bezeq Israeli

Poor diversification

The 3 months correlation between Matrix and Bezeq is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Matrix and Bezeq Israeli Telecommunicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bezeq Israeli Teleco and Matrix 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 Matrix are associated (or correlated) with Bezeq Israeli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bezeq Israeli Teleco has no effect on the direction of Matrix i.e., Matrix and Bezeq Israeli go up and down completely randomly.

Pair Corralation between Matrix and Bezeq Israeli

Assuming the 90 days trading horizon Matrix is expected to generate 0.95 times more return on investment than Bezeq Israeli. However, Matrix is 1.06 times less risky than Bezeq Israeli. It trades about 0.08 of its potential returns per unit of risk. Bezeq Israeli Telecommunication is currently generating about 0.07 per unit of risk. If you would invest  829,090  in Matrix on December 30, 2024 and sell it today you would earn a total of  54,810  from holding Matrix or generate 6.61% return on investment over 90 days.

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

Matrix  vs.  Bezeq Israeli Telecommunicatio

Matrix

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matrix are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Matrix may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Matrix and Bezeq Israeli

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

The idea behind Matrix and Bezeq Israeli Telecommunication 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.