Correlation Between PHOENIX BEVERAGES and MUA
Can any of the company-specific risk be diversified away by investing in both PHOENIX BEVERAGES and MUA 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 PHOENIX BEVERAGES and MUA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHOENIX BEVERAGES LTD and MUA LTD, you can compare the effects of market volatilities on PHOENIX BEVERAGES and MUA 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 PHOENIX BEVERAGES with a short position of MUA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHOENIX BEVERAGES and MUA.
Diversification Opportunities for PHOENIX BEVERAGES and MUA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PHOENIX and MUA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PHOENIX BEVERAGES LTD and MUA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUA LTD and PHOENIX BEVERAGES 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 PHOENIX BEVERAGES LTD are associated (or correlated) with MUA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUA LTD has no effect on the direction of PHOENIX BEVERAGES i.e., PHOENIX BEVERAGES and MUA go up and down completely randomly.
Pair Corralation between PHOENIX BEVERAGES and MUA
Assuming the 90 days trading horizon PHOENIX BEVERAGES LTD is expected to generate 1.77 times more return on investment than MUA. However, PHOENIX BEVERAGES is 1.77 times more volatile than MUA LTD. It trades about 0.45 of its potential returns per unit of risk. MUA LTD is currently generating about 0.2 per unit of risk. If you would invest 55,200 in PHOENIX BEVERAGES LTD on December 4, 2024 and sell it today you would earn a total of 5,000 from holding PHOENIX BEVERAGES LTD or generate 9.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PHOENIX BEVERAGES LTD vs. MUA LTD
Performance |
Timeline |
PHOENIX BEVERAGES LTD |
MUA LTD |
PHOENIX BEVERAGES and MUA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PHOENIX BEVERAGES and MUA
The main advantage of trading using opposite PHOENIX BEVERAGES and MUA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHOENIX BEVERAGES position performs unexpectedly, MUA 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 MUA will offset losses from the drop in MUA's long position.PHOENIX BEVERAGES vs. CAVELL TOURISTIC INVESTMENTS | PHOENIX BEVERAGES vs. QUALITY BEVERAGES LTD | PHOENIX BEVERAGES vs. UNITED INVESTMENTS LTD | PHOENIX BEVERAGES vs. AGAPE GLOBAL INVESTMENTS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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