Correlation Between Phoenix Footwear and Pacific Health

Can any of the company-specific risk be diversified away by investing in both Phoenix Footwear and Pacific Health 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 Footwear and Pacific Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phoenix Footwear Group and Pacific Health Care, you can compare the effects of market volatilities on Phoenix Footwear and Pacific Health 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 Footwear with a short position of Pacific Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Footwear and Pacific Health.

Diversification Opportunities for Phoenix Footwear and Pacific Health

0.31

Correlation Coefficient

Phoenix Footwear  Pacific Health

Weak diversification

The 3 months correlation between Phoenix and Pacific is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Footwear Group and Pacific Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Health Care and Phoenix Footwear 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 Footwear Group are associated (or correlated) with Pacific Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Health Care has no effect on the direction of Phoenix Footwear i.e., Phoenix Footwear and Pacific Health go up and down completely randomly.

Pair Corralation between Phoenix Footwear and Pacific Health

If you would invest  78.00  in Pacific Health Care on October 11, 2024 and sell it today you would lose (1.00) from holding Pacific Health Care or give up 1.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Phoenix Footwear Group  vs.  Pacific Health Care

Phoenix Footwear

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pacific Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Phoenix Footwear and Pacific Health

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

The idea behind Phoenix Footwear Group and Pacific Health Care 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.