Correlation Between Phonex and Trans Lux
Can any of the company-specific risk be diversified away by investing in both Phonex and Trans Lux 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 Phonex and Trans Lux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phonex Inc and Trans Lux Cp, you can compare the effects of market volatilities on Phonex and Trans Lux 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 Phonex with a short position of Trans Lux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phonex and Trans Lux.
Diversification Opportunities for Phonex and Trans Lux
Significant diversification
The 3 months correlation between Phonex and Trans is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Phonex Inc and Trans Lux Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Lux Cp and Phonex 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 Phonex Inc are associated (or correlated) with Trans Lux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Lux Cp has no effect on the direction of Phonex i.e., Phonex and Trans Lux go up and down completely randomly.
Pair Corralation between Phonex and Trans Lux
If you would invest 107.00 in Phonex Inc on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Phonex Inc or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Phonex Inc vs. Trans Lux Cp
Performance |
| Timeline |
| Phonex Inc |
| Trans Lux Cp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Phonex and Trans Lux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phonex and Trans Lux
The main advantage of trading using opposite Phonex and Trans Lux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phonex position performs unexpectedly, Trans Lux 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 Trans Lux will offset losses from the drop in Trans Lux's long position.The idea behind Phonex Inc and Trans Lux Cp 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.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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