Correlation Between DoubleDragon Properties and Philex Mining

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

By analyzing existing cross correlation between DoubleDragon Properties Corp and Philex Mining Corp, you can compare the effects of market volatilities on DoubleDragon Properties and Philex Mining 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 DoubleDragon Properties with a short position of Philex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DoubleDragon Properties and Philex Mining.

Diversification Opportunities for DoubleDragon Properties and Philex Mining

0.49

Correlation Coefficient

DoubleDragon Properties  Philex Mining

Very weak diversification

The 3 months correlation between DoubleDragon and Philex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding DoubleDragon Properties Corp and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp and DoubleDragon Properties 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 DoubleDragon Properties Corp are associated (or correlated) with Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of DoubleDragon Properties i.e., DoubleDragon Properties and Philex Mining go up and down completely randomly.

Pair Corralation between DoubleDragon Properties and Philex Mining

Assuming the 90 days trading horizon DoubleDragon Properties Corp is expected to generate 0.97 times more return on investment than Philex Mining. However, DoubleDragon Properties Corp is 1.03 times less risky than Philex Mining. It trades about 0.17 of its potential returns per unit of risk. Philex Mining Corp is currently generating about -0.01 per unit of risk. If you would invest  848.00  in DoubleDragon Properties Corp on September 15, 2024 and sell it today you would earn a total of  208.00  from holding DoubleDragon Properties Corp or generate 24.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

DoubleDragon Properties Corp  vs.  Philex Mining Corp

DoubleDragon Properties

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleDragon Properties Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DoubleDragon Properties exhibited solid returns over the last few months and may actually be approaching a breakup point.

Philex Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Philex Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Philex Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DoubleDragon Properties and Philex Mining

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

The idea behind DoubleDragon Properties Corp and Philex Mining Corp 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.