Correlation Between Herald Investment and Phoenix Group
Can any of the company-specific risk be diversified away by investing in both Herald Investment and Phoenix Group 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 Herald Investment and Phoenix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and Phoenix Group Holdings, you can compare the effects of market volatilities on Herald Investment and Phoenix Group 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 Herald Investment with a short position of Phoenix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Phoenix Group.
Diversification Opportunities for Herald Investment and Phoenix Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Herald and Phoenix is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Phoenix Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Group Holdings and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Phoenix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Group Holdings has no effect on the direction of Herald Investment i.e., Herald Investment and Phoenix Group go up and down completely randomly.
Pair Corralation between Herald Investment and Phoenix Group
Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 0.75 times more return on investment than Phoenix Group. However, Herald Investment Trust is 1.34 times less risky than Phoenix Group. It trades about 0.07 of its potential returns per unit of risk. Phoenix Group Holdings is currently generating about 0.02 per unit of risk. If you would invest 180,400 in Herald Investment Trust on August 31, 2024 and sell it today you would earn a total of 55,100 from holding Herald Investment Trust or generate 30.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Herald Investment Trust vs. Phoenix Group Holdings
Performance |
| Timeline |
| Herald Investment Trust |
| Phoenix Group Holdings |
Herald Investment and Phoenix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and Phoenix Group
The main advantage of trading using opposite Herald Investment and Phoenix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment position performs unexpectedly, Phoenix Group 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 Group will offset losses from the drop in Phoenix Group's long position.| Herald Investment vs. Alaska Air Group | Herald Investment vs. Public Storage | Herald Investment vs. JD Sports Fashion | Herald Investment vs. Datagroup SE |
| Phoenix Group vs. Aberdeen Diversified Income | Phoenix Group vs. Herald Investment Trust | Phoenix Group vs. Mindflair Plc | Phoenix Group vs. Fair Oaks Income |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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