Correlation Between Phoenix Holdings and MetLife
Can any of the company-specific risk be diversified away by investing in both Phoenix Holdings and MetLife 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 MetLife 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 MetLife, you can compare the effects of market volatilities on Phoenix Holdings and MetLife 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 MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Holdings and MetLife.
Diversification Opportunities for Phoenix Holdings and MetLife
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Phoenix and MetLife is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and MetLife go up and down completely randomly.
Pair Corralation between Phoenix Holdings and MetLife
Assuming the 90 days trading horizon The Phoenix Holdings is expected to generate 3.05 times more return on investment than MetLife. However, Phoenix Holdings is 3.05 times more volatile than MetLife. It trades about -0.04 of its potential returns per unit of risk. MetLife is currently generating about -0.27 per unit of risk. If you would invest 360,917 in The Phoenix Holdings on January 20, 2024 and sell it today you would lose (7,917) from holding The Phoenix Holdings or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
The Phoenix Holdings vs. MetLife
Performance |
| Timeline |
| Phoenix Holdings |
| MetLife |
Phoenix Holdings and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Holdings and MetLife
The main advantage of trading using opposite Phoenix Holdings and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Holdings position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| Phoenix Holdings vs. Harel Insurance Investments | Phoenix Holdings vs. Migdal Insurance | Phoenix Holdings vs. Menora Miv Hld | Phoenix Holdings vs. Israel Discount Bank |
| MetLife vs. Lincoln National | MetLife vs. Aflac Incorporated | MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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