Correlation Between Phoenix Holdings and Kadimastem

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

Diversification Opportunities for Phoenix Holdings and Kadimastem

0.85

Correlation Coefficient

Phoenix Holdings  Kadimastem

Very poor diversification

The 3 months correlation between Phoenix and Kadimastem is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and Kadimastem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadimastem 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 Kadimastem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadimastem has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and Kadimastem go up and down completely randomly.

Pair Corralation between Phoenix Holdings and Kadimastem

Assuming the 90 days trading horizon Phoenix Holdings is expected to generate 1.39 times less return on investment than Kadimastem. But when comparing it to its historical volatility, The Phoenix Holdings is 2.81 times less risky than Kadimastem. It trades about 0.06 of its potential returns per unit of risk. Kadimastem is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  107,400  in Kadimastem on September 23, 2024 and sell it today you would earn a total of  11,500  from holding Kadimastem or generate 10.71% return on investment over 90 days.

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

The Phoenix Holdings  vs.  Kadimastem

Phoenix Holdings

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Phoenix Holdings are ranked lower than 28 (%) 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.

Kadimastem

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kadimastem are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kadimastem sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phoenix Holdings and Kadimastem

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

The idea behind The Phoenix Holdings and Kadimastem 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.