Correlation Between Hurum and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Hurum 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 Hurum and Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Phoenix Materials Co, you can compare the effects of market volatilities on Hurum 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 Hurum with a short position of Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Phoenix Materials.
Diversification Opportunities for Hurum and Phoenix Materials
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hurum and Phoenix is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials and Hurum 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 Hurum Co 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 Hurum i.e., Hurum and Phoenix Materials go up and down completely randomly.
Pair Corralation between Hurum and Phoenix Materials
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Phoenix Materials. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.68 times less risky than Phoenix Materials. The stock trades about -0.05 of its potential returns per unit of risk. The Phoenix Materials Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 143,900 in Phoenix Materials Co on August 31, 2024 and sell it today you would lose (74,400) from holding Phoenix Materials Co or give up 51.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Hurum Co vs. Phoenix Materials Co
Performance |
| Timeline |
| Hurum |
| Phoenix Materials |
Hurum and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Phoenix Materials
The main advantage of trading using opposite Hurum and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum 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.| Hurum vs. Shinsegae Information Communication | Hurum vs. Korea Computer | Hurum vs. LG Display Co | Hurum vs. Sangsangin Investment Securities |
| Phoenix Materials vs. Dongsin Engineering Construction | Phoenix Materials vs. Doosan Fuel Cell | Phoenix Materials vs. Daishin Balance 1 | Phoenix Materials vs. Total Soft 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |