Correlation Between Phoslock Environmental and Prodigy Gold

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

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

Diversification Opportunities for Phoslock Environmental and Prodigy Gold

0.0

Correlation Coefficient

Phoslock Environmental  Prodigy Gold

Pay attention - limited upside

The 3 months correlation between Phoslock and Prodigy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Phoslock Environmental Technol and Prodigy Gold NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Gold NL and Phoslock Environmental 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 Phoslock Environmental Technologies are associated (or correlated) with Prodigy Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Gold NL has no effect on the direction of Phoslock Environmental i.e., Phoslock Environmental and Prodigy Gold go up and down completely randomly.

Pair Corralation between Phoslock Environmental and Prodigy Gold

If you would invest  0.20  in Prodigy Gold NL on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Prodigy Gold NL or generate 0.0% return on investment over 90 days.

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

Phoslock Environmental Technol  vs.  Prodigy Gold NL

Phoslock Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phoslock Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Phoslock Environmental is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Prodigy Gold NL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Prodigy Gold NL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Prodigy Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phoslock Environmental and Prodigy Gold

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

The idea behind Phoslock Environmental Technologies and Prodigy Gold NL 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.