Correlation Between PHI and Holcim
Can any of the company-specific risk be diversified away by investing in both PHI and Holcim 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 Holcim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Holcim, you can compare the effects of market volatilities on PHI and Holcim 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 Holcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Holcim.
Diversification Opportunities for PHI and Holcim
Very good diversification
The 3 months correlation between PHI and Holcim is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Holcim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holcim 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 Holcim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holcim has no effect on the direction of PHI i.e., PHI and Holcim go up and down completely randomly.
Pair Corralation between PHI and Holcim
Given the investment horizon of 90 days PHI Group is expected to generate 33.47 times more return on investment than Holcim. However, PHI is 33.47 times more volatile than Holcim. It trades about 0.15 of its potential returns per unit of risk. Holcim is currently generating about 0.07 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PHI Group vs. Holcim
Performance |
| Timeline |
| PHI Group |
| Holcim |
PHI and Holcim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Holcim
The main advantage of trading using opposite PHI and Holcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI position performs unexpectedly, Holcim 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 Holcim will offset losses from the drop in Holcim's long position.| PHI vs. Morgan Stanley | PHI vs. Goldman Sachs Group | PHI vs. Charles Schwab Corp | PHI vs. Interactive Brokers Group |
| Holcim vs. HeidelbergCement AG ADR | Holcim vs. Anhui Conch Cement | Holcim vs. Buzzi Unicem SpA | Holcim vs. Wienerberger Baustoffindustrie |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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