Correlation Between PHI and Puma SE
Can any of the company-specific risk be diversified away by investing in both PHI and Puma SE 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 Puma SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Puma SE, you can compare the effects of market volatilities on PHI and Puma SE 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 Puma SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Puma SE.
Diversification Opportunities for PHI and Puma SE
Excellent diversification
The 3 months correlation between PHI and Puma is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Puma SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma SE 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 Puma SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma SE has no effect on the direction of PHI i.e., PHI and Puma SE go up and down completely randomly.
Pair Corralation between PHI and Puma SE
Given the investment horizon of 90 days PHI Group is expected to generate 19.61 times more return on investment than Puma SE. However, PHI is 19.61 times more volatile than Puma SE. It trades about 0.15 of its potential returns per unit of risk. Puma SE is currently generating about -0.04 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. Puma SE
Performance |
| Timeline |
| PHI Group |
| Puma SE |
PHI and Puma SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Puma SE
The main advantage of trading using opposite PHI and Puma SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI position performs unexpectedly, Puma SE 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 Puma SE will offset losses from the drop in Puma SE's long position.| PHI vs. Morgan Stanley | PHI vs. Goldman Sachs Group | PHI vs. Charles Schwab Corp | PHI vs. Interactive Brokers Group |
| Puma SE vs. American Rebel Holdings | Puma SE vs. American Rebel Holdings | Puma SE vs. Crocs Inc | Puma SE vs. On Holding |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
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| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |