Correlation Between Atlanticus Holdings and PhenixFIN 525

Can any of the company-specific risk be diversified away by investing in both Atlanticus Holdings and PhenixFIN 525 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 Atlanticus Holdings and PhenixFIN 525 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atlanticus Holdings and PhenixFIN 525, you can compare the effects of market volatilities on Atlanticus Holdings and PhenixFIN 525 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 Atlanticus Holdings with a short position of PhenixFIN 525. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlanticus Holdings and PhenixFIN 525.

Diversification Opportunities for Atlanticus Holdings and PhenixFIN 525

0.74

Correlation Coefficient

Atlanticus Holdings  PhenixFIN 525

Poor diversification

The 3 months correlation between Atlanticus and PhenixFIN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and PhenixFIN 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PhenixFIN 525 and Atlanticus Holdings 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 Atlanticus Holdings are associated (or correlated) with PhenixFIN 525. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PhenixFIN 525 has no effect on the direction of Atlanticus Holdings i.e., Atlanticus Holdings and PhenixFIN 525 go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and PhenixFIN 525

Assuming the 90 days horizon Atlanticus Holdings is expected to generate 2.61 times less return on investment than PhenixFIN 525. In addition to that, Atlanticus Holdings is 1.12 times more volatile than PhenixFIN 525. It trades about 0.06 of its total potential returns per unit of risk. PhenixFIN 525 is currently generating about 0.17 per unit of volatility. If you would invest  2,154  in PhenixFIN 525 on September 19, 2024 and sell it today you would earn a total of  133.00  from holding PhenixFIN 525 or generate 6.17% return on investment over 90 days.

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

Atlanticus Holdings  vs.  PhenixFIN 525

Atlanticus Holdings

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

PhenixFIN 525

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PhenixFIN 525 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PhenixFIN 525 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Atlanticus Holdings and PhenixFIN 525

The main advantage of trading using opposite Atlanticus Holdings and PhenixFIN 525 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings position performs unexpectedly, PhenixFIN 525 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 525 will offset losses from the drop in PhenixFIN 525's long position.

The idea behind Atlanticus Holdings and PhenixFIN 525 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.