Correlation Between PHX Minerals and XXL Energy

Can any of the company-specific risk be diversified away by investing in both PHX Minerals and XXL Energy 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 PHX Minerals and XXL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PHX Minerals and XXL Energy Corp, you can compare the effects of market volatilities on PHX Minerals and XXL Energy 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 PHX Minerals with a short position of XXL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Minerals and XXL Energy.

Diversification Opportunities for PHX Minerals and XXL Energy

0.0

Correlation Coefficient

PHX Minerals  XXL Energy

Pay attention - limited upside

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

Pair Corralation between PHX Minerals and XXL Energy

If you would invest  381.00  in PHX Minerals on December 26, 2024 and sell it today you would earn a total of  17.00  from holding PHX Minerals or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

PHX Minerals  vs.  XXL Energy Corp

PHX Minerals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PHX Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, PHX Minerals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

XXL Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days XXL Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, XXL Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PHX Minerals and XXL Energy

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

The idea behind PHX Minerals and XXL Energy Corp 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.