Correlation Between Spotify Technology and Phoenix New
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Phoenix New 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 Spotify Technology and Phoenix New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Phoenix New Media, you can compare the effects of market volatilities on Spotify Technology and Phoenix New 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 Spotify Technology with a short position of Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Phoenix New.
Diversification Opportunities for Spotify Technology and Phoenix New
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spotify and Phoenix is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of Spotify Technology i.e., Spotify Technology and Phoenix New go up and down completely randomly.
Pair Corralation between Spotify Technology and Phoenix New
Given the investment horizon of 90 days Spotify Technology SA is expected to generate 0.63 times more return on investment than Phoenix New. However, Spotify Technology SA is 1.59 times less risky than Phoenix New. It trades about 0.37 of its potential returns per unit of risk. Phoenix New Media is currently generating about -0.1 per unit of risk. If you would invest 37,916 in Spotify Technology SA on August 26, 2024 and sell it today you would earn a total of 9,588 from holding Spotify Technology SA or generate 25.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Phoenix New Media
Performance |
| Timeline |
| Spotify Technology |
| Phoenix New Media |
Spotify Technology and Phoenix New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Phoenix New
The main advantage of trading using opposite Spotify Technology and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Phoenix New 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 Phoenix New will offset losses from the drop in Phoenix New's long position.| Spotify Technology vs. Trivago NV | Spotify Technology vs. Cheetah Mobile | Spotify Technology vs. Comscore | Spotify Technology vs. Arena Group Holdings |
| Phoenix New vs. Onfolio Holdings | Phoenix New vs. Starbox Group Holdings | Phoenix New vs. MediaAlpha | Phoenix New vs. Metalpha Technology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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