Correlation Between Phoenix New and Onfolio Holdings

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

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

Diversification Opportunities for Phoenix New and Onfolio Holdings

-0.37

Correlation Coefficient

Phoenix New  Onfolio Holdings

Very good diversification

The 3 months correlation between Phoenix and Onfolio is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and Onfolio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onfolio Holdings and Phoenix New 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 New Media are associated (or correlated) with Onfolio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onfolio Holdings has no effect on the direction of Phoenix New i.e., Phoenix New and Onfolio Holdings go up and down completely randomly.

Pair Corralation between Phoenix New and Onfolio Holdings

Given the investment horizon of 90 days Phoenix New Media is expected to under-perform the Onfolio Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Phoenix New Media is 1.43 times less risky than Onfolio Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Onfolio Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  84.00  in Onfolio Holdings on September 5, 2024 and sell it today you would earn a total of  81.00  from holding Onfolio Holdings or generate 96.43% return on investment over 90 days.

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

Phoenix New Media  vs.  Onfolio Holdings

Phoenix New Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phoenix New Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Onfolio Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Onfolio Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Onfolio Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phoenix New and Onfolio Holdings

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

The idea behind Phoenix New Media and Onfolio Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.