Correlation Between Aluflexpack and PHOENIX N

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

By analyzing existing cross correlation between Aluflexpack AG and PHOENIX N AG, you can compare the effects of market volatilities on Aluflexpack and PHOENIX N 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 Aluflexpack with a short position of PHOENIX N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluflexpack and PHOENIX N.

Diversification Opportunities for Aluflexpack and PHOENIX N

-0.18

Correlation Coefficient

Aluflexpack  PHOENIX N

Good diversification

The 3 months correlation between Aluflexpack and PHOENIX is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aluflexpack AG and PHOENIX N AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX N AG and Aluflexpack 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 Aluflexpack AG are associated (or correlated) with PHOENIX N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX N AG has no effect on the direction of Aluflexpack i.e., Aluflexpack and PHOENIX N go up and down completely randomly.

Pair Corralation between Aluflexpack and PHOENIX N

Assuming the 90 days trading horizon Aluflexpack AG is expected to generate 0.17 times more return on investment than PHOENIX N. However, Aluflexpack AG is 5.74 times less risky than PHOENIX N. It trades about 0.06 of its potential returns per unit of risk. PHOENIX N AG is currently generating about -0.34 per unit of risk. If you would invest  1,445  in Aluflexpack AG on October 4, 2024 and sell it today you would earn a total of  5.00  from holding Aluflexpack AG or generate 0.35% return on investment over 90 days.

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

Aluflexpack AG  vs.  PHOENIX N AG

Aluflexpack AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aluflexpack AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aluflexpack is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PHOENIX N AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHOENIX N AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Aluflexpack and PHOENIX N

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

The idea behind Aluflexpack AG and PHOENIX N AG 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.