Correlation Between Phillips and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Phillips and AAC TECHNOLOGHLDGADR 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 Phillips and AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Phillips and AAC TECHNOLOGHLDGADR 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 Phillips with a short position of AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Phillips and AAC TECHNOLOGHLDGADR
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phillips and AAC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Phillips 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 Phillips 66 are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Phillips i.e., Phillips and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Phillips and AAC TECHNOLOGHLDGADR
Assuming the 90 days horizon Phillips is expected to generate 3.4 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Phillips 66 is 1.9 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.03 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 239.00 in AAC TECHNOLOGHLDGADR on October 11, 2024 and sell it today you would earn a total of 225.00 from holding AAC TECHNOLOGHLDGADR or generate 94.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips 66 vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Phillips 66 |
| AAC TECHNOLOGHLDGADR |
Phillips and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Phillips and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Phillips vs. AAC TECHNOLOGHLDGADR | Phillips vs. ACCSYS TECHPLC EO | Phillips vs. ANGLO ASIAN MINING | Phillips vs. Perseus Mining Limited |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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