Correlation Between Israel Discount and Phoenix Holdings
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Phoenix Holdings 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 Israel Discount and Phoenix Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and The Phoenix Holdings, you can compare the effects of market volatilities on Israel Discount and Phoenix Holdings 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 Israel Discount with a short position of Phoenix Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Phoenix Holdings.
Diversification Opportunities for Israel Discount and Phoenix Holdings
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Phoenix is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and The Phoenix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Holdings and Israel Discount 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 Israel Discount Bank are associated (or correlated) with Phoenix Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Holdings has no effect on the direction of Israel Discount i.e., Israel Discount and Phoenix Holdings go up and down completely randomly.
Pair Corralation between Israel Discount and Phoenix Holdings
Assuming the 90 days trading horizon Israel Discount is expected to generate 1.09 times less return on investment than Phoenix Holdings. But when comparing it to its historical volatility, Israel Discount Bank is 1.37 times less risky than Phoenix Holdings. It trades about 0.82 of its potential returns per unit of risk. The Phoenix Holdings is currently generating about 0.65 of returns per unit of risk over similar time horizon. If you would invest 413,500 in The Phoenix Holdings on August 24, 2024 and sell it today you would earn a total of 51,900 from holding The Phoenix Holdings or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Israel Discount Bank vs. The Phoenix Holdings
Performance |
| Timeline |
| Israel Discount Bank |
| Phoenix Holdings |
Israel Discount and Phoenix Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Phoenix Holdings
The main advantage of trading using opposite Israel Discount and Phoenix Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Phoenix Holdings 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 Phoenix Holdings will offset losses from the drop in Phoenix Holdings' long position.| Israel Discount vs. Bank Leumi Le Israel | Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication |
| Phoenix Holdings vs. Harel Insurance Investments | Phoenix Holdings vs. Migdal Insurance | Phoenix Holdings vs. Menora Miv Hld | Phoenix Holdings vs. Israel Discount Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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