Correlation Between PCB Tec and Bezeq Israeli
Can any of the company-specific risk be diversified away by investing in both PCB Tec 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 PCB Tec and Bezeq Israeli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCB Tec and Bezeq Israeli Telecommunication, you can compare the effects of market volatilities on PCB Tec 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 PCB Tec with a short position of Bezeq Israeli. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCB Tec and Bezeq Israeli.
Diversification Opportunities for PCB Tec and Bezeq Israeli
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PCB and Bezeq is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PCB Tec 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 PCB Tec 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 PCB Tec 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 PCB Tec i.e., PCB Tec and Bezeq Israeli go up and down completely randomly.
Pair Corralation between PCB Tec and Bezeq Israeli
Assuming the 90 days trading horizon PCB Tec is expected to generate 1.29 times more return on investment than Bezeq Israeli. However, PCB Tec is 1.29 times more volatile than Bezeq Israeli Telecommunication. It trades about 0.13 of its potential returns per unit of risk. Bezeq Israeli Telecommunication is currently generating about -0.13 per unit of risk. If you would invest 35,000 in PCB Tec on January 20, 2024 and sell it today you would earn a total of 1,620 from holding PCB Tec or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCB Tec vs. Bezeq Israeli Telecommunicatio
Performance |
| Timeline |
| PCB Tec |
| Bezeq Israeli Teleco |
PCB Tec and Bezeq Israeli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCB Tec and Bezeq Israeli
The main advantage of trading using opposite PCB Tec and Bezeq Israeli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCB Tec 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.| PCB Tec vs. Automatic Bank Services | PCB Tec vs. EN Shoham Business | PCB Tec vs. Rapac Communication Infrastructure | PCB Tec vs. Tadiran Hldg |
| Bezeq Israeli vs. EN Shoham Business | Bezeq Israeli vs. Accel Solutions Group | Bezeq Israeli vs. SR Accord | Bezeq Israeli vs. Rapac Communication Infrastructure |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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