Correlation Between Pacificonline Systems and Philex Mining

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

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

Diversification Opportunities for Pacificonline Systems and Philex Mining

0.24

Correlation Coefficient

Pacificonline Systems  Philex Mining

Modest diversification

The 3 months correlation between Pacificonline and Philex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pacificonline Systems 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 Pacificonline Systems 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 Pacificonline Systems 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 Pacificonline Systems i.e., Pacificonline Systems and Philex Mining go up and down completely randomly.

Pair Corralation between Pacificonline Systems and Philex Mining

Assuming the 90 days trading horizon Pacificonline Systems is expected to under-perform the Philex Mining. In addition to that, Pacificonline Systems is 1.3 times more volatile than Philex Mining Corp. It trades about -0.17 of its total potential returns per unit of risk. Philex Mining Corp is currently generating about 0.03 per unit of volatility. If you would invest  270.00  in Philex Mining Corp on September 2, 2024 and sell it today you would earn a total of  8.00  from holding Philex Mining Corp or generate 2.96% return on investment over 90 days.

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

Pacificonline Systems  vs.  Philex Mining Corp

Pacificonline Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacificonline Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Philex Mining Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Philex Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Philex Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pacificonline Systems and Philex Mining

The main advantage of trading using opposite Pacificonline Systems and Philex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacificonline Systems 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 Pacificonline Systems 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 Global Correlations module to find global opportunities by holding instruments from different markets.