Correlation Between CONSTANCE HOTELS and PHOENIX INVESTMENT

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

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

Diversification Opportunities for CONSTANCE HOTELS and PHOENIX INVESTMENT

-0.81

Correlation Coefficient

CONSTANCE HOTELS  PHOENIX INVESTMENT

Pay attention - limited upside

The 3 months correlation between CONSTANCE and PHOENIX is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CONSTANCE HOTELS SERVICES and PHOENIX INVESTMENT PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX INVESTMENT PANY and CONSTANCE HOTELS 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 CONSTANCE HOTELS SERVICES are associated (or correlated) with PHOENIX INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX INVESTMENT PANY has no effect on the direction of CONSTANCE HOTELS i.e., CONSTANCE HOTELS and PHOENIX INVESTMENT go up and down completely randomly.

Pair Corralation between CONSTANCE HOTELS and PHOENIX INVESTMENT

Assuming the 90 days trading horizon CONSTANCE HOTELS SERVICES is expected to under-perform the PHOENIX INVESTMENT. But the stock apears to be less risky and, when comparing its historical volatility, CONSTANCE HOTELS SERVICES is 1.41 times less risky than PHOENIX INVESTMENT. The stock trades about -0.26 of its potential returns per unit of risk. The PHOENIX INVESTMENT PANY is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  36,625  in PHOENIX INVESTMENT PANY on December 4, 2024 and sell it today you would earn a total of  6,900  from holding PHOENIX INVESTMENT PANY or generate 18.84% return on investment over 90 days.

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

CONSTANCE HOTELS SERVICES  vs.  PHOENIX INVESTMENT PANY

CONSTANCE HOTELS SERVICES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONSTANCE HOTELS SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

PHOENIX INVESTMENT PANY

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PHOENIX INVESTMENT PANY are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, PHOENIX INVESTMENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CONSTANCE HOTELS and PHOENIX INVESTMENT

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

The idea behind CONSTANCE HOTELS SERVICES and PHOENIX INVESTMENT PANY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.