Correlation Between AKA Brands and Phonex

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

By analyzing existing cross correlation between AKA Brands Holding and Phonex Inc, you can compare the effects of market volatilities on AKA Brands and Phonex 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 AKA Brands with a short position of Phonex. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKA Brands and Phonex.

Diversification Opportunities for AKA Brands and Phonex

-0.48

Correlation Coefficient

AKA Brands  Phonex

Very good diversification

The 3 months correlation between AKA and Phonex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Phonex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phonex Inc and AKA Brands 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 AKA Brands Holding are associated (or correlated) with Phonex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phonex Inc has no effect on the direction of AKA Brands i.e., AKA Brands and Phonex go up and down completely randomly.

Pair Corralation between AKA Brands and Phonex

Considering the 90-day investment horizon AKA Brands Holding is expected to generate 1.32 times more return on investment than Phonex. However, AKA Brands is 1.32 times more volatile than Phonex Inc. It trades about 0.05 of its potential returns per unit of risk. Phonex Inc is currently generating about 0.0 per unit of risk. If you would invest  1,536  in AKA Brands Holding on October 20, 2024 and sell it today you would earn a total of  283.00  from holding AKA Brands Holding or generate 18.42% return on investment over 90 days.

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

AKA Brands Holding  vs.  Phonex Inc

AKA Brands Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Phonex Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phonex Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Phonex may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AKA Brands and Phonex

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

The idea behind AKA Brands Holding and Phonex Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.