Correlation Between NetSol Technologies and Phenixfin

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

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

Diversification Opportunities for NetSol Technologies and Phenixfin

-0.84

Correlation Coefficient

NetSol Technologies  Phenixfin

Pay attention - limited upside

The 3 months correlation between NetSol and Phenixfin is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin and NetSol Technologies 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 NetSol Technologies 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 has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Phenixfin go up and down completely randomly.

Pair Corralation between NetSol Technologies and Phenixfin

Given the investment horizon of 90 days NetSol Technologies is expected to under-perform the Phenixfin. In addition to that, NetSol Technologies is 1.54 times more volatile than Phenixfin. It trades about -0.05 of its total potential returns per unit of risk. Phenixfin is currently generating about 0.1 per unit of volatility. If you would invest  4,932  in Phenixfin on December 22, 2024 and sell it today you would earn a total of  401.00  from holding Phenixfin or generate 8.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

NetSol Technologies  vs.  Phenixfin

NetSol Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Phenixfin

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phenixfin are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Phenixfin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NetSol Technologies and Phenixfin

The main advantage of trading using opposite NetSol Technologies and Phenixfin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetSol Technologies 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 NetSol Technologies and Phenixfin 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.