Correlation Between Phoenix Holdings and Airport City

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

By analyzing existing cross correlation between The Phoenix Holdings and Airport City, you can compare the effects of market volatilities on Phoenix Holdings and Airport City 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 Phoenix Holdings with a short position of Airport City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Holdings and Airport City.

Diversification Opportunities for Phoenix Holdings and Airport City

0.37

Correlation Coefficient

Phoenix Holdings  Airport City

Weak diversification

The 3 months correlation between Phoenix and Airport is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Phoenix Holdings and Airport City in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airport City and Phoenix Holdings 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 The Phoenix Holdings are associated (or correlated) with Airport City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airport City has no effect on the direction of Phoenix Holdings i.e., Phoenix Holdings and Airport City go up and down completely randomly.

Pair Corralation between Phoenix Holdings and Airport City

Assuming the 90 days trading horizon The Phoenix Holdings is expected to generate 0.98 times more return on investment than Airport City. However, The Phoenix Holdings is 1.02 times less risky than Airport City. It trades about -0.06 of its potential returns per unit of risk. Airport City is currently generating about -0.09 per unit of risk. If you would invest  367,049  in The Phoenix Holdings on January 27, 2024 and sell it today you would lose (10,849) from holding The Phoenix Holdings or give up 2.96% of portfolio value over 90 days.

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

The Phoenix Holdings  vs.  Airport City

Phoenix Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Phoenix Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Phoenix Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Airport City

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Airport City has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Phoenix Holdings and Airport City

The main advantage of trading using opposite Phoenix Holdings and Airport City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Holdings position performs unexpectedly, Airport City 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 Airport City will offset losses from the drop in Airport City's long position.

The idea behind The Phoenix Holdings and Airport City 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.