Correlation Between PDD Holdings and Phonex
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Phonex 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 PDD Holdings and Phonex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Phonex Inc, you can compare the effects of market volatilities on PDD Holdings and Phonex 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 PDD Holdings with a short position of Phonex. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Phonex.
Diversification Opportunities for PDD Holdings and Phonex
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PDD and Phonex is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Phonex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phonex Inc and PDD Holdings 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 PDD Holdings are associated (or correlated) with Phonex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phonex Inc has no effect on the direction of PDD Holdings i.e., PDD Holdings and Phonex go up and down completely randomly.
Pair Corralation between PDD Holdings and Phonex
Considering the 90-day investment horizon PDD Holdings is expected to generate 1.35 times less return on investment than Phonex. But when comparing it to its historical volatility, PDD Holdings is 1.4 times less risky than Phonex. It trades about 0.02 of its potential returns per unit of risk. Phonex Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Phonex Inc on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Phonex Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Phonex Inc
Performance |
| Timeline |
| PDD Holdings |
| Phonex Inc |
PDD Holdings and Phonex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Phonex
The main advantage of trading using opposite PDD Holdings and Phonex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Phonex 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 Phonex will offset losses from the drop in Phonex's long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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