Correlation Between PHOENIX INVESTMENT and LOTTOTECH

Can any of the company-specific risk be diversified away by investing in both PHOENIX INVESTMENT and LOTTOTECH 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 LOTTOTECH 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 LOTTOTECH LTD, you can compare the effects of market volatilities on PHOENIX INVESTMENT and LOTTOTECH 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 LOTTOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHOENIX INVESTMENT and LOTTOTECH.

Diversification Opportunities for PHOENIX INVESTMENT and LOTTOTECH

-0.04

Correlation Coefficient

PHOENIX INVESTMENT  LOTTOTECH

Good diversification

The 3 months correlation between PHOENIX and LOTTOTECH is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PHOENIX INVESTMENT PANY and LOTTOTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOTTOTECH LTD 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 LOTTOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOTTOTECH LTD has no effect on the direction of PHOENIX INVESTMENT i.e., PHOENIX INVESTMENT and LOTTOTECH go up and down completely randomly.

Pair Corralation between PHOENIX INVESTMENT and LOTTOTECH

Assuming the 90 days trading horizon PHOENIX INVESTMENT PANY is expected to generate 0.2 times more return on investment than LOTTOTECH. However, PHOENIX INVESTMENT PANY is 4.97 times less risky than LOTTOTECH. It trades about 0.29 of its potential returns per unit of risk. LOTTOTECH LTD is currently generating about 0.01 per unit of risk. If you would invest  33,375  in PHOENIX INVESTMENT PANY on September 13, 2024 and sell it today you would earn a total of  3,250  from holding PHOENIX INVESTMENT PANY or generate 9.74% return on investment over 90 days.

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

PHOENIX INVESTMENT PANY  vs.  LOTTOTECH LTD

PHOENIX INVESTMENT PANY

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHOENIX INVESTMENT PANY are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, PHOENIX INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

LOTTOTECH LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LOTTOTECH LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, LOTTOTECH is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PHOENIX INVESTMENT and LOTTOTECH

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

The idea behind PHOENIX INVESTMENT PANY and LOTTOTECH LTD 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.