Correlation Between Phoenix New and Marcus
Can any of the company-specific risk be diversified away by investing in both Phoenix New and Marcus 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 New and Marcus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix New Media and Marcus, you can compare the effects of market volatilities on Phoenix New and Marcus 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 New with a short position of Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and Marcus.
Diversification Opportunities for Phoenix New and Marcus
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phoenix and Marcus is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and Phoenix New 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 New Media are associated (or correlated) with Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Phoenix New i.e., Phoenix New and Marcus go up and down completely randomly.
Pair Corralation between Phoenix New and Marcus
Given the investment horizon of 90 days Phoenix New Media is expected to generate 3.18 times more return on investment than Marcus. However, Phoenix New is 3.18 times more volatile than Marcus. It trades about 0.02 of its potential returns per unit of risk. Marcus is currently generating about 0.04 per unit of risk. If you would invest 255.00 in Phoenix New Media on August 24, 2024 and sell it today you would lose (8.00) from holding Phoenix New Media or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix New Media vs. Marcus
Performance |
| Timeline |
| Phoenix New Media |
| Marcus |
Phoenix New and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix New and Marcus
The main advantage of trading using opposite Phoenix New and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.| Phoenix New vs. Baidu Inc | Phoenix New vs. Twilio Inc | Phoenix New vs. Spotify Technology SA | Phoenix New vs. Weibo Corp |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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