Correlation Between Asset Entities and Phoenix New

Can any of the company-specific risk be diversified away by investing in both Asset Entities 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 Asset Entities and Phoenix New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asset Entities Class and Phoenix New Media, you can compare the effects of market volatilities on Asset Entities 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 Asset Entities with a short position of Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset Entities and Phoenix New.

Diversification Opportunities for Asset Entities and Phoenix New

-0.53

Correlation Coefficient

Asset Entities  Phoenix New

Excellent diversification

The 3 months correlation between Asset and Phoenix is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Asset Entities Class 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 Asset Entities 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 Asset Entities Class 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 Asset Entities i.e., Asset Entities and Phoenix New go up and down completely randomly.

Pair Corralation between Asset Entities and Phoenix New

Given the investment horizon of 90 days Asset Entities is expected to generate 11.29 times less return on investment than Phoenix New. But when comparing it to its historical volatility, Asset Entities Class is 1.09 times less risky than Phoenix New. It trades about 0.01 of its potential returns per unit of risk. Phoenix New Media is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  158.00  in Phoenix New Media on February 26, 2024 and sell it today you would earn a total of  26.00  from holding Phoenix New Media or generate 16.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Asset Entities Class  vs.  Phoenix New Media

Asset Entities Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asset Entities Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Asset Entities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Phoenix New Media

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix New Media are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Phoenix New reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asset Entities and Phoenix New

The main advantage of trading using opposite Asset Entities and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asset Entities 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.

The idea behind Asset Entities Class and Phoenix New Media 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.