Correlation Between Aprogen Healthcare and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Phoenix Materials 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 Aprogen Healthcare and Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and Phoenix Materials Co, you can compare the effects of market volatilities on Aprogen Healthcare and Phoenix Materials 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 Aprogen Healthcare with a short position of Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Phoenix Materials.
Diversification Opportunities for Aprogen Healthcare and Phoenix Materials
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aprogen and Phoenix is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Phoenix Materials go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Phoenix Materials
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Phoenix Materials. In addition to that, Aprogen Healthcare is 1.05 times more volatile than Phoenix Materials Co. It trades about -0.18 of its total potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.09 per unit of volatility. If you would invest 76,600 in Phoenix Materials Co on September 3, 2024 and sell it today you would lose (7,100) from holding Phoenix Materials Co or give up 9.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Phoenix Materials Co
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Phoenix Materials |
Aprogen Healthcare and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Phoenix Materials
The main advantage of trading using opposite Aprogen Healthcare and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Phoenix Materials 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 Materials will offset losses from the drop in Phoenix Materials' long position.| Aprogen Healthcare vs. Display Tech Co | Aprogen Healthcare vs. Sam Yang Foods | Aprogen Healthcare vs. Organic Special Pet | Aprogen Healthcare vs. FoodNamoo |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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