Correlation Between AECOM TECHNOLOGY and PHENIXFIN

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

By analyzing existing cross correlation between AECOM TECHNOLOGY and PHENIXFIN P DL, you can compare the effects of market volatilities on AECOM TECHNOLOGY and PHENIXFIN 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 AECOM TECHNOLOGY with a short position of PHENIXFIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and PHENIXFIN.

Diversification Opportunities for AECOM TECHNOLOGY and PHENIXFIN

0.39

Correlation Coefficient

AECOM TECHNOLOGY  PHENIXFIN

Weak diversification

The 3 months correlation between AECOM and PHENIXFIN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and PHENIXFIN P DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHENIXFIN P DL and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY are associated (or correlated) with PHENIXFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHENIXFIN P DL has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and PHENIXFIN go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and PHENIXFIN

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 1.57 times less return on investment than PHENIXFIN. But when comparing it to its historical volatility, AECOM TECHNOLOGY is 1.17 times less risky than PHENIXFIN. It trades about 0.05 of its potential returns per unit of risk. PHENIXFIN P DL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,983  in PHENIXFIN P DL on October 10, 2024 and sell it today you would earn a total of  1,737  from holding PHENIXFIN P DL or generate 58.23% return on investment over 90 days.

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

AECOM TECHNOLOGY  vs.  PHENIXFIN P DL

AECOM TECHNOLOGY

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PHENIXFIN P DL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHENIXFIN P DL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PHENIXFIN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AECOM TECHNOLOGY and PHENIXFIN

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

The idea behind AECOM TECHNOLOGY and PHENIXFIN P DL 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.