Correlation Between British Amer and Phoenix Holdings
Can any of the company-specific risk be diversified away by investing in both British Amer 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 British Amer and Phoenix Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and The Phoenix Holdings, you can compare the effects of market volatilities on British Amer 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 British Amer with a short position of Phoenix Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Phoenix Holdings.
Diversification Opportunities for British Amer and Phoenix Holdings
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between British and Phoenix is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and The Phoenix Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Holdings and British Amer 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 British American Tobacco 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 British Amer i.e., British Amer and Phoenix Holdings go up and down completely randomly.
Pair Corralation between British Amer and Phoenix Holdings
Considering the 90-day investment horizon British American Tobacco is expected to generate 0.36 times more return on investment than Phoenix Holdings. However, British American Tobacco is 2.81 times less risky than Phoenix Holdings. It trades about -0.06 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 2,988 in British American Tobacco on January 26, 2024 and sell it today you would lose (39.00) from holding British American Tobacco or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.19% |
| Values | Daily Returns |
British American Tobacco vs. The Phoenix Holdings
Performance |
| Timeline |
| British American Tobacco |
| Phoenix Holdings |
British Amer and Phoenix Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Phoenix Holdings
The main advantage of trading using opposite British Amer and Phoenix Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer 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.| British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Philip Morris International | British Amer vs. Japan Tobacco ADR |
| Phoenix Holdings vs. Harel Insurance Investments | Phoenix Holdings vs. Migdal Insurance | Phoenix Holdings vs. Menora Miv Hld | Phoenix Holdings vs. Israel Discount Bank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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