Correlation Between Jerusalem and Bezeq Israeli
Can any of the company-specific risk be diversified away by investing in both Jerusalem 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 Jerusalem and Bezeq Israeli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jerusalem and Bezeq Israeli Telecommunication, you can compare the effects of market volatilities on Jerusalem 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 Jerusalem with a short position of Bezeq Israeli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerusalem and Bezeq Israeli.
Diversification Opportunities for Jerusalem and Bezeq Israeli
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jerusalem and Bezeq is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jerusalem 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 Jerusalem 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 Jerusalem 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 Jerusalem i.e., Jerusalem and Bezeq Israeli go up and down completely randomly.
Pair Corralation between Jerusalem and Bezeq Israeli
Assuming the 90 days trading horizon Jerusalem is expected to generate 1.04 times more return on investment than Bezeq Israeli. However, Jerusalem is 1.04 times more volatile than Bezeq Israeli Telecommunication. It trades about 0.04 of its potential returns per unit of risk. Bezeq Israeli Telecommunication is currently generating about 0.0 per unit of risk. If you would invest 106,450 in Jerusalem on January 16, 2024 and sell it today you would earn a total of 27,250 from holding Jerusalem or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jerusalem vs. Bezeq Israeli Telecommunicatio
Performance |
| Timeline |
| Jerusalem |
| Bezeq Israeli Teleco |
Jerusalem and Bezeq Israeli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jerusalem and Bezeq Israeli
The main advantage of trading using opposite Jerusalem and Bezeq Israeli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jerusalem 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.| Jerusalem vs. Mizrahi Tefahot | Jerusalem vs. First International Bank | Jerusalem vs. Israel Discount Bank | Jerusalem vs. Bank Leumi Le Israel |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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