Correlation Between Phoenix Materials and Atinum Investment

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

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

Diversification Opportunities for Phoenix Materials and Atinum Investment

0.05

Correlation Coefficient

Phoenix Materials  Atinum Investment

Significant diversification

The 3 months correlation between Phoenix and Atinum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials Co and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and Phoenix Materials 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 Phoenix Materials Co are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Phoenix Materials i.e., Phoenix Materials and Atinum Investment go up and down completely randomly.

Pair Corralation between Phoenix Materials and Atinum Investment

Assuming the 90 days trading horizon Phoenix Materials Co is expected to under-perform the Atinum Investment. In addition to that, Phoenix Materials is 3.72 times more volatile than Atinum Investment Co. It trades about -0.05 of its total potential returns per unit of risk. Atinum Investment Co is currently generating about -0.02 per unit of volatility. If you would invest  215,500  in Atinum Investment Co on December 25, 2024 and sell it today you would lose (4,500) from holding Atinum Investment Co or give up 2.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

Phoenix Materials Co  vs.  Atinum Investment Co

Phoenix Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phoenix Materials Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Atinum Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Phoenix Materials and Atinum Investment

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

The idea behind Phoenix Materials Co and Atinum Investment Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.