Correlation Between Harel Insurance and Phoenix Holdings

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

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

Diversification Opportunities for Harel Insurance and Phoenix Holdings

0.29

Correlation Coefficient

Harel Insurance  Phoenix Holdings

Modest diversification

The 3 months correlation between Harel and Phoenix is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Harel Insurance Investments and The Phoenix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Holdings and Harel Insurance 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 Harel Insurance Investments 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 Harel Insurance i.e., Harel Insurance and Phoenix Holdings go up and down completely randomly.

Pair Corralation between Harel Insurance and Phoenix Holdings

Assuming the 90 days trading horizon Harel Insurance Investments is expected to under-perform the Phoenix Holdings. In addition to that, Harel Insurance is 1.29 times more volatile than The Phoenix Holdings. It trades about -0.12 of its total potential returns per unit of risk. The Phoenix Holdings is currently generating about -0.1 per unit of volatility. If you would invest  380,500  in The Phoenix Holdings on February 8, 2024 and sell it today you would lose (8,800) from holding The Phoenix Holdings or give up 2.31% of portfolio value over 90 days.

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

Harel Insurance Investments  vs.  The Phoenix Holdings

Harel Insurance Inve

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harel Insurance Investments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Harel Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

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 Harel Insurance and Phoenix Holdings

The main advantage of trading using opposite Harel Insurance and Phoenix Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harel Insurance 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 Harel Insurance Investments 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.