Correlation Between PHI and Emera Maine

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

By analyzing existing cross correlation between PHI Group and Emera Maine PFD, you can compare the effects of market volatilities on PHI and Emera Maine 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 PHI with a short position of Emera Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Emera Maine.

Diversification Opportunities for PHI and Emera Maine

-0.4

Correlation Coefficient

PHI  Emera Maine

Very good diversification

The 3 months correlation between PHI and Emera is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Emera Maine PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Maine PFD and PHI 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 PHI Group are associated (or correlated) with Emera Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Maine PFD has no effect on the direction of PHI i.e., PHI and Emera Maine go up and down completely randomly.

Pair Corralation between PHI and Emera Maine

If you would invest  0.03  in PHI Group on September 1, 2024 and sell it today you would lose (0.01) from holding PHI Group or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

PHI Group  vs.  Emera Maine PFD

PHI Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PHI Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward indicators, PHI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Emera Maine PFD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emera Maine PFD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Emera Maine is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PHI and Emera Maine

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

The idea behind PHI Group and Emera Maine PFD 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 Commodity Directory module to find actively traded commodities issued by global exchanges.