Correlation Between ATRenew and Phenixfin

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

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

Diversification Opportunities for ATRenew and Phenixfin

0.01

Correlation Coefficient

ATRenew  Phenixfin

Significant diversification

The 3 months correlation between ATRenew and Phenixfin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin and ATRenew 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 ATRenew Inc DRC are associated (or correlated) with Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of ATRenew i.e., ATRenew and Phenixfin go up and down completely randomly.

Pair Corralation between ATRenew and Phenixfin

Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 2.85 times more return on investment than Phenixfin. However, ATRenew is 2.85 times more volatile than Phenixfin. It trades about 0.08 of its potential returns per unit of risk. Phenixfin is currently generating about 0.06 per unit of risk. If you would invest  244.00  in ATRenew Inc DRC on October 7, 2024 and sell it today you would earn a total of  31.00  from holding ATRenew Inc DRC or generate 12.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

ATRenew Inc DRC  vs.  Phenixfin

ATRenew Inc DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRenew Inc DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ATRenew is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Phenixfin

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with ATRenew and Phenixfin

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

The idea behind ATRenew Inc DRC and Phenixfin 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.