Correlation Between PHN Multi and Mawer Global

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

By analyzing existing cross correlation between PHN Multi Style All Cap and Mawer Global Small, you can compare the effects of market volatilities on PHN Multi and Mawer Global 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 PHN Multi with a short position of Mawer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Multi and Mawer Global.

Diversification Opportunities for PHN Multi and Mawer Global

-0.01

Correlation Coefficient

PHN Multi  Mawer Global

Good diversification

The 3 months correlation between PHN and Mawer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PHN Multi Style All Cap and Mawer Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Global Small and PHN Multi 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 PHN Multi Style All Cap are associated (or correlated) with Mawer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Global Small has no effect on the direction of PHN Multi i.e., PHN Multi and Mawer Global go up and down completely randomly.

Pair Corralation between PHN Multi and Mawer Global

Assuming the 90 days trading horizon PHN Multi Style All Cap is expected to generate 2.19 times more return on investment than Mawer Global. However, PHN Multi is 2.19 times more volatile than Mawer Global Small. It trades about -0.02 of its potential returns per unit of risk. Mawer Global Small is currently generating about -0.08 per unit of risk. If you would invest  2,658  in PHN Multi Style All Cap on October 7, 2024 and sell it today you would lose (75.00) from holding PHN Multi Style All Cap or give up 2.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

PHN Multi Style All Cap  vs.  Mawer Global Small

PHN Multi Style

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHN Multi Style All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, PHN Multi is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Mawer Global Small

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PHN Multi and Mawer Global

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

The idea behind PHN Multi Style All Cap and Mawer Global Small 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.