Correlation Between Wireless Power and PH Tech

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

By analyzing existing cross correlation between Wireless Power Amplifier and PH Tech Co, you can compare the effects of market volatilities on Wireless Power and PH Tech 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 Wireless Power with a short position of PH Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Power and PH Tech.

Diversification Opportunities for Wireless Power and PH Tech

0.51

Correlation Coefficient

Wireless Power  PH Tech

Very weak diversification

The 3 months correlation between Wireless and 239890 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of Wireless Power i.e., Wireless Power and PH Tech go up and down completely randomly.

Pair Corralation between Wireless Power and PH Tech

Assuming the 90 days trading horizon Wireless Power Amplifier is expected to generate 0.88 times more return on investment than PH Tech. However, Wireless Power Amplifier is 1.13 times less risky than PH Tech. It trades about 0.01 of its potential returns per unit of risk. PH Tech Co is currently generating about -0.12 per unit of risk. If you would invest  299,000  in Wireless Power Amplifier on October 6, 2024 and sell it today you would lose (17,000) from holding Wireless Power Amplifier or give up 5.69% of portfolio value over 90 days.

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

Wireless Power Amplifier  vs.  PH Tech Co

Wireless Power Amplifier

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wireless Power Amplifier are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Wireless Power may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PH Tech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wireless Power and PH Tech

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

The idea behind Wireless Power Amplifier and PH Tech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.