Correlation Between Xometry and PHX Energy

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

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

Diversification Opportunities for Xometry and PHX Energy

0.64

Correlation Coefficient

Xometry  PHX Energy

Poor diversification

The 3 months correlation between Xometry and PHX is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services and Xometry 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 Xometry are associated (or correlated) with PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of Xometry i.e., Xometry and PHX Energy go up and down completely randomly.

Pair Corralation between Xometry and PHX Energy

Given the investment horizon of 90 days Xometry is expected to under-perform the PHX Energy. In addition to that, Xometry is 2.38 times more volatile than PHX Energy Services. It trades about -0.18 of its total potential returns per unit of risk. PHX Energy Services is currently generating about 0.01 per unit of volatility. If you would invest  640.00  in PHX Energy Services on December 25, 2024 and sell it today you would earn a total of  0.00  from holding PHX Energy Services or generate 0.0% return on investment over 90 days.

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

Xometry  vs.  PHX Energy Services

Xometry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xometry has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

PHX Energy Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days PHX Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, PHX 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 Xometry and PHX Energy

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

The idea behind Xometry and PHX Energy Services 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.