Correlation Between PHI and Weiqiao Textile
Can any of the company-specific risk be diversified away by investing in both PHI and Weiqiao Textile 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 Weiqiao Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Weiqiao Textile, you can compare the effects of market volatilities on PHI and Weiqiao Textile 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 Weiqiao Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Weiqiao Textile.
Diversification Opportunities for PHI and Weiqiao Textile
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PHI and Weiqiao is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Weiqiao Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weiqiao Textile 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 Weiqiao Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weiqiao Textile has no effect on the direction of PHI i.e., PHI and Weiqiao Textile go up and down completely randomly.
Pair Corralation between PHI and Weiqiao Textile
If you would invest 0.02 in PHI Group on September 1, 2024 and sell it today you would earn a total of 0.00 from holding PHI Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PHI Group vs. Weiqiao Textile
Performance |
| Timeline |
| PHI Group |
| Weiqiao Textile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PHI and Weiqiao Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Weiqiao Textile
The main advantage of trading using opposite PHI and Weiqiao Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI position performs unexpectedly, Weiqiao Textile 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 Weiqiao Textile will offset losses from the drop in Weiqiao Textile's long position.The idea behind PHI Group and Weiqiao Textile 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.| Weiqiao Textile vs. Townsquare Media | Weiqiao Textile vs. Inflection Point Acquisition | Weiqiao Textile vs. Nomura Holdings ADR | Weiqiao Textile vs. Stagwell |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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