Correlation Between Bezeq Israeli and Bank Leumi

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

Diversification Opportunities for Bezeq Israeli and Bank Leumi

0.9

Correlation Coefficient

Bezeq Israeli  Bank Leumi

Almost no diversification

The 3 months correlation between Bezeq and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bezeq Israeli Telecommunicatio and Bank Leumi Le Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Leumi Le 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 Bank Leumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Leumi Le has no effect on the direction of Bezeq Israeli i.e., Bezeq Israeli and Bank Leumi go up and down completely randomly.

Pair Corralation between Bezeq Israeli and Bank Leumi

Assuming the 90 days trading horizon Bezeq Israeli is expected to generate 1.11 times less return on investment than Bank Leumi. In addition to that, Bezeq Israeli is 1.04 times more volatile than Bank Leumi Le Israel. It trades about 0.18 of its total potential returns per unit of risk. Bank Leumi Le Israel is currently generating about 0.21 per unit of volatility. If you would invest  533,209  in Bank Leumi Le Israel on May 7, 2025 and sell it today you would earn a total of  90,991  from holding Bank Leumi Le Israel or generate 17.06% return on investment over 90 days.

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

Bezeq Israeli Telecommunicatio  vs.  Bank Leumi Le Israel

Bezeq Israeli Teleco

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bezeq Israeli Telecommunication are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bezeq Israeli sustained solid returns over the last few months and may actually be approaching a breakup point.

Bank Leumi Le

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Leumi Le Israel are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bank Leumi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bezeq Israeli and Bank Leumi

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

The idea behind Bezeq Israeli Telecommunication and Bank Leumi Le Israel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.