Correlation Between Phihong Technology and Energous
Can any of the company-specific risk be diversified away by investing in both Phihong Technology and Energous 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 Phihong Technology and Energous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phihong Technology Co and Energous, you can compare the effects of market volatilities on Phihong Technology and Energous 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 Phihong Technology with a short position of Energous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phihong Technology and Energous.
Diversification Opportunities for Phihong Technology and Energous
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Phihong and Energous is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Phihong Technology Co and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous and Phihong 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 Phihong Technology Co are associated (or correlated) with Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Phihong Technology i.e., Phihong Technology and Energous go up and down completely randomly.
Pair Corralation between Phihong Technology and Energous
Assuming the 90 days trading horizon Phihong Technology Co is expected to generate 0.4 times more return on investment than Energous. However, Phihong Technology Co is 2.48 times less risky than Energous. It trades about -0.03 of its potential returns per unit of risk. Energous is currently generating about -0.07 per unit of risk. If you would invest 5,430 in Phihong Technology Co on January 19, 2024 and sell it today you would lose (100.00) from holding Phihong Technology Co or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Phihong Technology Co vs. Energous
Performance |
| Timeline |
| Phihong Technology |
| Energous |
Phihong Technology and Energous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phihong Technology and Energous
The main advantage of trading using opposite Phihong Technology and Energous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phihong Technology position performs unexpectedly, Energous 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 Energous will offset losses from the drop in Energous' long position.| Phihong Technology vs. TECO Electric Machinery | Phihong Technology vs. Taiwan Cement Corp | Phihong Technology vs. Great Wall Enterprise |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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