Correlation Between Philex Mining and PXP Energy
Can any of the company-specific risk be diversified away by investing in both Philex Mining and PXP Energy 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 Philex Mining and PXP Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philex Mining Corp and PXP Energy Corp, you can compare the effects of market volatilities on Philex Mining and PXP Energy 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 Philex Mining with a short position of PXP Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and PXP Energy.
Diversification Opportunities for Philex Mining and PXP Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Philex and PXP is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and PXP Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PXP Energy Corp and Philex Mining 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 Philex Mining Corp are associated (or correlated) with PXP Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PXP Energy Corp has no effect on the direction of Philex Mining i.e., Philex Mining and PXP Energy go up and down completely randomly.
Pair Corralation between Philex Mining and PXP Energy
Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the PXP Energy. In addition to that, Philex Mining is 1.18 times more volatile than PXP Energy Corp. It trades about -0.37 of its total potential returns per unit of risk. PXP Energy Corp is currently generating about -0.27 per unit of volatility. If you would invest 321.00 in PXP Energy Corp on September 1, 2024 and sell it today you would lose (32.00) from holding PXP Energy Corp or give up 9.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philex Mining Corp vs. PXP Energy Corp
Performance |
| Timeline |
| Philex Mining Corp |
| PXP Energy Corp |
Philex Mining and PXP Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philex Mining and PXP Energy
The main advantage of trading using opposite Philex Mining and PXP Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philex Mining position performs unexpectedly, PXP Energy 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 PXP Energy will offset losses from the drop in PXP Energy's long position.| Philex Mining vs. Figaro Coffee Group | Philex Mining vs. Lepanto Consolidated Mining | Philex Mining vs. Cebu Air Preferred | Philex Mining vs. SM Investments Corp |
| PXP Energy vs. SM Investments Corp | PXP Energy vs. San Miguel Pure | PXP Energy vs. Ayala Corp | PXP Energy vs. Ayala Land |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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