Correlation Between HPIL Holding and PHI

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

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

Diversification Opportunities for HPIL Holding and PHI

0.0

Correlation Coefficient

HPIL Holding  PHI

Pay attention - limited upside

The 3 months correlation between HPIL and PHI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HPIL Holding and PHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHI Group and HPIL Holding 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 HPIL Holding are associated (or correlated) with PHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHI Group has no effect on the direction of HPIL Holding i.e., HPIL Holding and PHI go up and down completely randomly.

Pair Corralation between HPIL Holding and PHI

If you would invest  0.10  in PHI Group on December 2, 2024 and sell it today you would lose (0.08) from holding PHI Group or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

HPIL Holding  vs.  PHI Group

HPIL Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days HPIL Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, HPIL Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

PHI Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHI Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, PHI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HPIL Holding and PHI

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

The idea behind HPIL Holding and PHI Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.