Correlation Between Phillips and Wesco Aircraft

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Can any of the company-specific risk be diversified away by investing in both Phillips and Wesco Aircraft 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 Wesco Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Wesco Aircraft Holdings, you can compare the effects of market volatilities on Phillips and Wesco Aircraft 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 Wesco Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Wesco Aircraft.

Diversification Opportunities for Phillips and Wesco Aircraft

0.0
  Correlation Coefficient

Pay attention - limited upside

The 24 months correlation between Phillips and Wesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Wesco Aircraft Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesco Aircraft Holdings 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 Wesco Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesco Aircraft Holdings has no effect on the direction of Phillips i.e., Phillips and Wesco Aircraft go up and down completely randomly.

Pair Corralation between Phillips and Wesco Aircraft

If you would invest  14,534  in Phillips 66 on December 29, 2023 and sell it today you would earn a total of  1,362  from holding Phillips 66 or generate 9.37% return on investment over 90 days.
Time Period24 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Phillips 66  vs.  Wesco Aircraft Holdings

 Performance 
       Timeline  
Phillips 66 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Phillips 66 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Phillips may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Wesco Aircraft Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Wesco Aircraft Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Wesco Aircraft is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Phillips and Wesco Aircraft Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Phillips and Wesco Aircraft

The main advantage of trading using opposite Phillips and Wesco Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Wesco Aircraft 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 Wesco Aircraft will offset losses from the drop in Wesco Aircraft's long position.
The idea behind Phillips 66 and Wesco Aircraft Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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