Correlation Between Solo Brands and Phonex
Can any of the company-specific risk be diversified away by investing in both Solo 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 Solo Brands and Phonex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solo Brands and Phonex Inc, you can compare the effects of market volatilities on Solo 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 Solo Brands with a short position of Phonex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solo Brands and Phonex.
Diversification Opportunities for Solo Brands and Phonex
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solo and Phonex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Solo Brands and Phonex Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phonex Inc and Solo 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 Solo Brands 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 Solo Brands i.e., Solo Brands and Phonex go up and down completely randomly.
Pair Corralation between Solo Brands and Phonex
Considering the 90-day investment horizon Solo Brands is expected to under-perform the Phonex. But the stock apears to be less risky and, when comparing its historical volatility, Solo Brands is 2.88 times less risky than Phonex. The stock trades about -0.29 of its potential returns per unit of risk. The Phonex Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Phonex Inc on December 2, 2024 and sell it today you would earn a total of 26.00 from holding Phonex Inc or generate 23.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Solo Brands vs. Phonex Inc
Performance |
Timeline |
Solo Brands |
Phonex Inc |
Solo Brands and Phonex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Solo Brands and Phonex
The main advantage of trading using opposite Solo Brands and Phonex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solo 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.Solo Brands vs. Qurate Retail Series | Solo Brands vs. Hour Loop | Solo Brands vs. 1StdibsCom | Solo Brands vs. Baozun Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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