Correlation Between PHOENIX INVESTMENT and CONSTANCE HOTELS

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

By analyzing existing cross correlation between PHOENIX INVESTMENT PANY and CONSTANCE HOTELS SERVICES, you can compare the effects of market volatilities on PHOENIX INVESTMENT and CONSTANCE HOTELS 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 INVESTMENT with a short position of CONSTANCE HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHOENIX INVESTMENT and CONSTANCE HOTELS.

Diversification Opportunities for PHOENIX INVESTMENT and CONSTANCE HOTELS

-0.81

Correlation Coefficient

PHOENIX INVESTMENT  CONSTANCE HOTELS

Pay attention - limited upside

The 3 months correlation between PHOENIX and CONSTANCE is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PHOENIX INVESTMENT PANY and CONSTANCE HOTELS SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSTANCE HOTELS SERVICES and PHOENIX INVESTMENT 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 INVESTMENT PANY are associated (or correlated) with CONSTANCE HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSTANCE HOTELS SERVICES has no effect on the direction of PHOENIX INVESTMENT i.e., PHOENIX INVESTMENT and CONSTANCE HOTELS go up and down completely randomly.

Pair Corralation between PHOENIX INVESTMENT and CONSTANCE HOTELS

Assuming the 90 days trading horizon PHOENIX INVESTMENT PANY is expected to generate 1.41 times more return on investment than CONSTANCE HOTELS. However, PHOENIX INVESTMENT is 1.41 times more volatile than CONSTANCE HOTELS SERVICES. It trades about 0.35 of its potential returns per unit of risk. CONSTANCE HOTELS SERVICES is currently generating about -0.26 per unit of risk. If you would invest  36,625  in PHOENIX INVESTMENT PANY on December 4, 2024 and sell it today you would earn a total of  6,900  from holding PHOENIX INVESTMENT PANY or generate 18.84% return on investment over 90 days.

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

PHOENIX INVESTMENT PANY  vs.  CONSTANCE HOTELS SERVICES

PHOENIX INVESTMENT PANY

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in PHOENIX INVESTMENT PANY are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, PHOENIX INVESTMENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

CONSTANCE HOTELS SERVICES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONSTANCE HOTELS SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with PHOENIX INVESTMENT and CONSTANCE HOTELS

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

The idea behind PHOENIX INVESTMENT PANY and CONSTANCE HOTELS SERVICES 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.