Correlation Between Phoenix Holdings and Israel Opportunity
Can any of the company-specific risk be diversified away by investing in both Phoenix Holdings and Israel Opportunity 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 Phoenix Holdings and Israel Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Phoenix Holdings and Israel Opportunity , you can compare the effects of market volatilities on Phoenix Holdings and Israel Opportunity 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 Phoenix Holdings with a short position of Israel Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Holdings and Israel Opportunity.
Diversification Opportunities for Phoenix Holdings and Israel Opportunity
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phoenix and Israel is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and Israel Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Opportunity and Phoenix Holdings 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 The Phoenix Holdings are associated (or correlated) with Israel Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Opportunity has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and Israel Opportunity go up and down completely randomly.
Pair Corralation between Phoenix Holdings and Israel Opportunity
Assuming the 90 days trading horizon The Phoenix Holdings is expected to generate 0.59 times more return on investment than Israel Opportunity. However, The Phoenix Holdings is 1.69 times less risky than Israel Opportunity. It trades about 0.11 of its potential returns per unit of risk. Israel Opportunity is currently generating about 0.04 per unit of risk. If you would invest 356,364 in The Phoenix Holdings on August 25, 2024 and sell it today you would earn a total of 109,036 from holding The Phoenix Holdings or generate 30.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Phoenix Holdings vs. Israel Opportunity
Performance |
| Timeline |
| Phoenix Holdings |
| Israel Opportunity |
Phoenix Holdings and Israel Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Holdings and Israel Opportunity
The main advantage of trading using opposite Phoenix Holdings and Israel Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Holdings position performs unexpectedly, Israel Opportunity 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 Israel Opportunity will offset losses from the drop in Israel Opportunity's long position.| Phoenix Holdings vs. Harel Insurance Investments | Phoenix Holdings vs. Migdal Insurance | Phoenix Holdings vs. Menora Miv Hld | Phoenix Holdings vs. Israel Discount Bank |
| Israel Opportunity vs. OPC Energy | Israel Opportunity vs. Delek Group | Israel Opportunity vs. Lapidoth | Israel Opportunity vs. Naphtha |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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