Correlation Between Phoenix Holdings and Orbit Technologies

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

Diversification Opportunities for Phoenix Holdings and Orbit Technologies

0.59

Correlation Coefficient

Phoenix Holdings  Orbit Technologies

Very weak diversification

The 3 months correlation between Phoenix and Orbit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and Orbit Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Technologies 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 Orbit Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Technologies has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and Orbit Technologies go up and down completely randomly.

Pair Corralation between Phoenix Holdings and Orbit Technologies

Assuming the 90 days trading horizon The Phoenix Holdings is expected to generate 0.98 times more return on investment than Orbit Technologies. However, The Phoenix Holdings is 1.03 times less risky than Orbit Technologies. It trades about 0.27 of its potential returns per unit of risk. Orbit Technologies is currently generating about 0.08 per unit of risk. If you would invest  515,408  in The Phoenix Holdings on December 31, 2024 and sell it today you would earn a total of  170,692  from holding The Phoenix Holdings or generate 33.12% return on investment over 90 days.

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

The Phoenix Holdings  vs.  Orbit Technologies

Phoenix Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Phoenix Holdings are ranked lower than 21 (%) 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.

Orbit Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Orbit Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Orbit Technologies may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Phoenix Holdings and Orbit Technologies

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

The idea behind The Phoenix Holdings and Orbit Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.