Correlation Between 718549AD0 and United Guardian

Can any of the company-specific risk be diversified away by investing in both 718549AD0 and United Guardian 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 718549AD0 and United Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phillips 66 Partners and United Guardian, you can compare the effects of market volatilities on 718549AD0 and United Guardian 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 718549AD0 with a short position of United Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of 718549AD0 and United Guardian.

Diversification Opportunities for 718549AD0 and United Guardian

-0.1

Correlation Coefficient

718549AD0  United Guardian

Good diversification

The 3 months correlation between 718549AD0 and United is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 Partners and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian and 718549AD0 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 Phillips 66 Partners are associated (or correlated) with United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of 718549AD0 i.e., 718549AD0 and United Guardian go up and down completely randomly.

Pair Corralation between 718549AD0 and United Guardian

Assuming the 90 days trading horizon Phillips 66 Partners is expected to generate 0.56 times more return on investment than United Guardian. However, Phillips 66 Partners is 1.8 times less risky than United Guardian. It trades about 0.0 of its potential returns per unit of risk. United Guardian is currently generating about -0.08 per unit of risk. If you would invest  9,692  in Phillips 66 Partners on October 10, 2024 and sell it today you would lose (77.00) from holding Phillips 66 Partners or give up 0.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.68%
Values	Daily Returns

Phillips 66 Partners  vs.  United Guardian

Phillips 66 Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phillips 66 Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 718549AD0 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

United Guardian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Guardian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with 718549AD0 and United Guardian

The main advantage of trading using opposite 718549AD0 and United Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 718549AD0 position performs unexpectedly, United Guardian 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 United Guardian will offset losses from the drop in United Guardian's long position.

The idea behind Phillips 66 Partners and United Guardian 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 Global Correlations module to find global opportunities by holding instruments from different markets.