Correlation Between Phoenix Silicon and WinMate Communication

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

By analyzing existing cross correlation between Phoenix Silicon International and WinMate Communication INC, you can compare the effects of market volatilities on Phoenix Silicon and WinMate Communication 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 Silicon with a short position of WinMate Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Silicon and WinMate Communication.

Diversification Opportunities for Phoenix Silicon and WinMate Communication

0.05

Correlation Coefficient

Phoenix Silicon  WinMate Communication

Significant diversification

The 3 months correlation between Phoenix and WinMate is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Silicon International and WinMate Communication INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinMate Communication INC and Phoenix Silicon 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 Silicon International are associated (or correlated) with WinMate Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinMate Communication INC has no effect on the direction of Phoenix Silicon i.e., Phoenix Silicon and WinMate Communication go up and down completely randomly.

Pair Corralation between Phoenix Silicon and WinMate Communication

Assuming the 90 days trading horizon Phoenix Silicon is expected to generate 1.32 times less return on investment than WinMate Communication. In addition to that, Phoenix Silicon is 2.14 times more volatile than WinMate Communication INC. It trades about 0.03 of its total potential returns per unit of risk. WinMate Communication INC is currently generating about 0.08 per unit of volatility. If you would invest  14,250  in WinMate Communication INC on September 17, 2024 and sell it today you would earn a total of  1,000.00  from holding WinMate Communication INC or generate 7.02% return on investment over 90 days.

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

Phoenix Silicon International  vs.  WinMate Communication INC

Phoenix Silicon Inte

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix Silicon International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Phoenix Silicon is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

WinMate Communication INC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WinMate Communication INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, WinMate Communication may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Phoenix Silicon and WinMate Communication

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

The idea behind Phoenix Silicon International and WinMate Communication INC 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.