Correlation Between Phoenix Materials and Cots Technology
Can any of the company-specific risk be diversified away by investing in both Phoenix Materials and Cots Technology 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 Materials and Cots Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Materials Co and Cots Technology Co, you can compare the effects of market volatilities on Phoenix Materials and Cots Technology 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 Materials with a short position of Cots Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Materials and Cots Technology.
Diversification Opportunities for Phoenix Materials and Cots Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Phoenix and Cots is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials Co and Cots Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cots Technology and Phoenix Materials 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 Phoenix Materials Co are associated (or correlated) with Cots Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cots Technology has no effect on the direction of Phoenix Materials i.e., Phoenix Materials and Cots Technology go up and down completely randomly.
Pair Corralation between Phoenix Materials and Cots Technology
Assuming the 90 days trading horizon Phoenix Materials Co is expected to generate 1.18 times more return on investment than Cots Technology. However, Phoenix Materials is 1.18 times more volatile than Cots Technology Co. It trades about 0.18 of its potential returns per unit of risk. Cots Technology Co is currently generating about 0.0 per unit of risk. If you would invest 68,500 in Phoenix Materials Co on October 13, 2024 and sell it today you would earn a total of 7,500 from holding Phoenix Materials Co or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Materials Co vs. Cots Technology Co
Performance |
| Timeline |
| Phoenix Materials |
| Cots Technology |
Phoenix Materials and Cots Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Materials and Cots Technology
The main advantage of trading using opposite Phoenix Materials and Cots Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Materials position performs unexpectedly, Cots Technology 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 Cots Technology will offset losses from the drop in Cots Technology's long position.| Phoenix Materials vs. Woorim Machinery Co | Phoenix Materials vs. Seohee Construction Co | Phoenix Materials vs. WONIK Materials CoLtd | Phoenix Materials vs. LG Household Healthcare |
| Cots Technology vs. RF Materials Co | Cots Technology vs. Phoenix Materials Co | Cots Technology vs. National Plastic Co | Cots Technology vs. Camus Engineering Construction |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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