Correlation Between Phillips and Mangels Industrial

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

By analyzing existing cross correlation between Phillips 66 and Mangels Industrial SA, you can compare the effects of market volatilities on Phillips and Mangels Industrial 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 Phillips with a short position of Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Mangels Industrial.

Diversification Opportunities for Phillips and Mangels Industrial

-0.25

Correlation Coefficient

Phillips  Mangels Industrial

Very good diversification

The 3 months correlation between Phillips and Mangels is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial and Phillips 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 Phillips 66 are associated (or correlated) with Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Phillips i.e., Phillips and Mangels Industrial go up and down completely randomly.

Pair Corralation between Phillips and Mangels Industrial

Assuming the 90 days trading horizon Phillips 66 is expected to under-perform the Mangels Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Phillips 66 is 4.02 times less risky than Mangels Industrial. The stock trades about -0.53 of its potential returns per unit of risk. The Mangels Industrial SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  668.00  in Mangels Industrial SA on October 4, 2024 and sell it today you would earn a total of  131.00  from holding Mangels Industrial SA or generate 19.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Phillips 66  vs.  Mangels Industrial SA

Phillips 66

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phillips 66 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mangels Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Phillips and Mangels Industrial

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

The idea behind Phillips 66 and Mangels Industrial SA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.