Correlation Between Metall Zug and PHOENIX N

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

By analyzing existing cross correlation between Metall Zug AG and PHOENIX N AG, you can compare the effects of market volatilities on Metall Zug and PHOENIX N 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 Metall Zug with a short position of PHOENIX N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metall Zug and PHOENIX N.

Diversification Opportunities for Metall Zug and PHOENIX N

0.03

Correlation Coefficient

Metall Zug  PHOENIX N

Significant diversification

The 3 months correlation between Metall and PHOENIX is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Metall Zug AG and PHOENIX N AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX N AG and Metall Zug 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 Metall Zug AG are associated (or correlated) with PHOENIX N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX N AG has no effect on the direction of Metall Zug i.e., Metall Zug and PHOENIX N go up and down completely randomly.

Pair Corralation between Metall Zug and PHOENIX N

Assuming the 90 days trading horizon Metall Zug AG is expected to generate 1.22 times more return on investment than PHOENIX N. However, Metall Zug is 1.22 times more volatile than PHOENIX N AG. It trades about 0.01 of its potential returns per unit of risk. PHOENIX N AG is currently generating about -0.05 per unit of risk. If you would invest  114,000  in Metall Zug AG on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Metall Zug AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Metall Zug AG  vs.  PHOENIX N AG

Metall Zug AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metall Zug AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Metall Zug is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PHOENIX N AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHOENIX N AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Metall Zug and PHOENIX N

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

The idea behind Metall Zug AG and PHOENIX N AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.