Correlation Between PHI and Leonardo SpA
Can any of the company-specific risk be diversified away by investing in both PHI and Leonardo SpA 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 Leonardo SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Leonardo SpA ADR, you can compare the effects of market volatilities on PHI and Leonardo SpA 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 Leonardo SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Leonardo SpA.
Diversification Opportunities for PHI and Leonardo SpA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PHI and Leonardo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Leonardo SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leonardo SpA ADR 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 Leonardo SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leonardo SpA ADR has no effect on the direction of PHI i.e., PHI and Leonardo SpA go up and down completely randomly.
Pair Corralation between PHI and Leonardo SpA
Given the investment horizon of 90 days PHI Group is expected to generate 25.4 times more return on investment than Leonardo SpA. However, PHI is 25.4 times more volatile than Leonardo SpA ADR. It trades about 0.15 of its potential returns per unit of risk. Leonardo SpA ADR is currently generating about 0.22 per unit of risk. If you would invest 0.02 in PHI Group on August 28, 2024 and sell it today you would lose (0.01) from holding PHI Group or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHI Group vs. Leonardo SpA ADR
Performance |
| Timeline |
| PHI Group |
| Leonardo SpA ADR |
PHI and Leonardo SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Leonardo SpA
The main advantage of trading using opposite PHI and Leonardo SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI position performs unexpectedly, Leonardo SpA 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 Leonardo SpA will offset losses from the drop in Leonardo SpA's long position.| PHI vs. Morgan Stanley | PHI vs. Goldman Sachs Group | PHI vs. Charles Schwab Corp | PHI vs. Interactive Brokers Group |
| Leonardo SpA vs. Moog Inc | Leonardo SpA vs. BAE Systems PLC | Leonardo SpA vs. Park Electrochemical | Leonardo SpA vs. Triumph Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |