Correlation Between Nasdaq and Phoenix Mills

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

By analyzing existing cross correlation between Nasdaq Inc and The Phoenix Mills, you can compare the effects of market volatilities on Nasdaq and Phoenix Mills 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 Nasdaq with a short position of Phoenix Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Phoenix Mills.

Diversification Opportunities for Nasdaq and Phoenix Mills

-0.07

Correlation Coefficient

Nasdaq  Phoenix Mills

Good diversification

The 3 months correlation between Nasdaq and Phoenix is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and The Phoenix Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Mills and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Phoenix Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Mills has no effect on the direction of Nasdaq i.e., Nasdaq and Phoenix Mills go up and down completely randomly.

Pair Corralation between Nasdaq and Phoenix Mills

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.38 times more return on investment than Phoenix Mills. However, Nasdaq Inc is 2.61 times less risky than Phoenix Mills. It trades about 0.15 of its potential returns per unit of risk. The Phoenix Mills is currently generating about 0.02 per unit of risk. If you would invest  7,308  in Nasdaq Inc on September 15, 2024 and sell it today you would earn a total of  704.00  from holding Nasdaq Inc or generate 9.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Nasdaq Inc  vs.  The Phoenix Mills

Nasdaq Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Phoenix Mills

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Phoenix Mills are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Phoenix Mills is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and Phoenix Mills

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

The idea behind Nasdaq Inc and The Phoenix Mills 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.