Correlation Between PhenixFIN 525 and Realty Income

Can any of the company-specific risk be diversified away by investing in both PhenixFIN 525 and Realty Income 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 PhenixFIN 525 and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PhenixFIN 525 and Realty Income, you can compare the effects of market volatilities on PhenixFIN 525 and Realty Income 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 PhenixFIN 525 with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of PhenixFIN 525 and Realty Income.

Diversification Opportunities for PhenixFIN 525 and Realty Income

-0.55

Correlation Coefficient

PhenixFIN 525  Realty Income

Excellent diversification

The 3 months correlation between PhenixFIN and Realty is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PhenixFIN 525 and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and PhenixFIN 525 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 PhenixFIN 525 are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of PhenixFIN 525 i.e., PhenixFIN 525 and Realty Income go up and down completely randomly.

Pair Corralation between PhenixFIN 525 and Realty Income

Assuming the 90 days horizon PhenixFIN 525 is expected to generate 1.07 times more return on investment than Realty Income. However, PhenixFIN 525 is 1.07 times more volatile than Realty Income. It trades about 0.03 of its potential returns per unit of risk. Realty Income is currently generating about -0.01 per unit of risk. If you would invest  1,942  in PhenixFIN 525 on October 7, 2024 and sell it today you would earn a total of  338.00  from holding PhenixFIN 525 or generate 17.4% return on investment over 90 days.

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

PhenixFIN 525  vs.  Realty Income

PhenixFIN 525

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PhenixFIN 525 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PhenixFIN 525 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realty Income 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 Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PhenixFIN 525 and Realty Income

The main advantage of trading using opposite PhenixFIN 525 and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PhenixFIN 525 position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.

The idea behind PhenixFIN 525 and Realty Income 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.