Correlation Between ECD Automotive and PHINIA
Can any of the company-specific risk be diversified away by investing in both ECD Automotive and PHINIA 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 ECD Automotive and PHINIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and PHINIA Inc, you can compare the effects of market volatilities on ECD Automotive and PHINIA 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 ECD Automotive with a short position of PHINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and PHINIA.
Diversification Opportunities for ECD Automotive and PHINIA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ECD and PHINIA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc and ECD Automotive 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 ECD Automotive Design are associated (or correlated) with PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of ECD Automotive i.e., ECD Automotive and PHINIA go up and down completely randomly.
Pair Corralation between ECD Automotive and PHINIA
Given the investment horizon of 90 days ECD Automotive Design is expected to under-perform the PHINIA. In addition to that, ECD Automotive is 1.76 times more volatile than PHINIA Inc. It trades about -0.11 of its total potential returns per unit of risk. PHINIA Inc is currently generating about 0.06 per unit of volatility. If you would invest 4,595 in PHINIA Inc on November 1, 2024 and sell it today you would earn a total of 402.00 from holding PHINIA Inc or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECD Automotive Design vs. PHINIA Inc
Performance |
| Timeline |
| ECD Automotive Design |
| PHINIA Inc |
ECD Automotive and PHINIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECD Automotive and PHINIA
The main advantage of trading using opposite ECD Automotive and PHINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive position performs unexpectedly, PHINIA 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 PHINIA will offset losses from the drop in PHINIA's long position.| ECD Automotive vs. Emerson Radio | ECD Automotive vs. The Cheesecake Factory | ECD Automotive vs. Marine Products | ECD Automotive vs. Sonos Inc |
| PHINIA vs. KVH Industries | PHINIA vs. Modine Manufacturing | PHINIA vs. Reyna Silver Corp | PHINIA vs. Denison Mines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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