Correlation Between Azrieli and Phoenix Holdings

Can any of the company-specific risk be diversified away by investing in both Azrieli 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 Azrieli and Phoenix Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Azrieli Group and The Phoenix Holdings, you can compare the effects of market volatilities on Azrieli 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 Azrieli with a short position of Phoenix Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azrieli and Phoenix Holdings.

Diversification Opportunities for Azrieli and Phoenix Holdings

0.36

Correlation Coefficient

Azrieli  Phoenix Holdings

Weak diversification

The 3 months correlation between Azrieli and Phoenix is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Azrieli Group and The Phoenix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Holdings and Azrieli 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 Azrieli Group 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 Azrieli i.e., Azrieli and Phoenix Holdings go up and down completely randomly.

Pair Corralation between Azrieli and Phoenix Holdings

Assuming the 90 days trading horizon Azrieli Group is expected to generate 0.85 times more return on investment than Phoenix Holdings. However, Azrieli Group is 1.18 times less risky than Phoenix Holdings. It trades about 0.08 of its potential returns per unit of risk. The Phoenix Holdings is currently generating about 0.03 per unit of risk. If you would invest  2,292,043  in Azrieli Group on February 15, 2024 and sell it today you would earn a total of  152,957  from holding Azrieli Group or generate 6.67% return on investment over 90 days.

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

Azrieli Group  vs.  The Phoenix Holdings

Azrieli Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Azrieli Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Azrieli may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Phoenix Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Phoenix Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Phoenix Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Azrieli and Phoenix Holdings

The main advantage of trading using opposite Azrieli and Phoenix Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azrieli 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.

The idea behind Azrieli Group and The Phoenix Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.