Correlation Between Phoenix Holdings and Inbar Group

Can any of the company-specific risk be diversified away by investing in both Phoenix Holdings and Inbar 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 Phoenix Holdings and Inbar Group 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 Inbar Group Finance, you can compare the effects of market volatilities on Phoenix Holdings and Inbar 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 Phoenix Holdings with a short position of Inbar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Holdings and Inbar Group.

Diversification Opportunities for Phoenix Holdings and Inbar Group

0.63

Correlation Coefficient

Phoenix Holdings  Inbar Group

Poor diversification

The 3 months correlation between Phoenix and Inbar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance 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 Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and Inbar Group go up and down completely randomly.

Pair Corralation between Phoenix Holdings and Inbar Group

Assuming the 90 days trading horizon Phoenix Holdings is expected to generate 3.48 times less return on investment than Inbar Group. But when comparing it to its historical volatility, The Phoenix Holdings is 9.24 times less risky than Inbar Group. It trades about 0.43 of its potential returns per unit of risk. Inbar Group Finance is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  32,420  in Inbar Group Finance on November 28, 2024 and sell it today you would earn a total of  35,580  from holding Inbar Group Finance or generate 109.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.04%
Values	Daily Returns

The Phoenix Holdings  vs.  Inbar Group Finance

Phoenix Holdings

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Phoenix Holdings are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Phoenix Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Inbar Group Finance

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inbar Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phoenix Holdings and Inbar Group

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

The idea behind The Phoenix Holdings and Inbar Group Finance 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.