Correlation Between PHI and Chow Sang
Can any of the company-specific risk be diversified away by investing in both PHI and Chow Sang 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 PHI and Chow Sang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Chow Sang Sang, you can compare the effects of market volatilities on PHI and Chow Sang 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 PHI with a short position of Chow Sang. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Chow Sang.
Diversification Opportunities for PHI and Chow Sang
Excellent diversification
The 3 months correlation between PHI and Chow is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Chow Sang Sang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chow Sang Sang and PHI 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 PHI Group are associated (or correlated) with Chow Sang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chow Sang Sang has no effect on the direction of PHI i.e., PHI and Chow Sang go up and down completely randomly.
Pair Corralation between PHI and Chow Sang
Given the investment horizon of 90 days PHI Group is expected to generate 80.01 times more return on investment than Chow Sang. However, PHI is 80.01 times more volatile than Chow Sang Sang. It trades about 0.09 of its potential returns per unit of risk. Chow Sang Sang is currently generating about 0.14 per unit of risk. If you would invest 0.06 in PHI Group on August 31, 2024 and sell it today you would lose (0.04) from holding PHI Group or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.16% |
| Values | Daily Returns |
PHI Group vs. Chow Sang Sang
Performance |
| Timeline |
| PHI Group |
| Chow Sang Sang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PHI and Chow Sang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Chow Sang
The main advantage of trading using opposite PHI and Chow Sang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI position performs unexpectedly, Chow Sang 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 Chow Sang will offset losses from the drop in Chow Sang's long position.The idea behind PHI Group and Chow Sang Sang pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Chow Sang vs. Xponential Fitness | Chow Sang vs. Constellation Brands Class | Chow Sang vs. Teleflex Incorporated | Chow Sang vs. Valneva SE ADR |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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