Correlation Between LUX ISLAND and PHOENIX INVESTMENT

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

By analyzing existing cross correlation between LUX ISLAND RESORTS and PHOENIX INVESTMENT PANY, you can compare the effects of market volatilities on LUX ISLAND and PHOENIX INVESTMENT 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 LUX ISLAND with a short position of PHOENIX INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUX ISLAND and PHOENIX INVESTMENT.

Diversification Opportunities for LUX ISLAND and PHOENIX INVESTMENT

-0.85

Correlation Coefficient

LUX ISLAND  PHOENIX INVESTMENT

Pay attention - limited upside

The 3 months correlation between LUX and PHOENIX is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding LUX ISLAND RESORTS and PHOENIX INVESTMENT PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHOENIX INVESTMENT PANY and LUX ISLAND 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 LUX ISLAND RESORTS are associated (or correlated) with PHOENIX INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHOENIX INVESTMENT PANY has no effect on the direction of LUX ISLAND i.e., LUX ISLAND and PHOENIX INVESTMENT go up and down completely randomly.

Pair Corralation between LUX ISLAND and PHOENIX INVESTMENT

Assuming the 90 days trading horizon LUX ISLAND RESORTS is expected to under-perform the PHOENIX INVESTMENT. In addition to that, LUX ISLAND is 3.35 times more volatile than PHOENIX INVESTMENT PANY. It trades about -0.1 of its total potential returns per unit of risk. PHOENIX INVESTMENT PANY is currently generating about 0.29 per unit of volatility. If you would invest  33,400  in PHOENIX INVESTMENT PANY on September 15, 2024 and sell it today you would earn a total of  3,225  from holding PHOENIX INVESTMENT PANY or generate 9.66% return on investment over 90 days.

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

LUX ISLAND RESORTS  vs.  PHOENIX INVESTMENT PANY

LUX ISLAND RESORTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LUX ISLAND RESORTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

PHOENIX INVESTMENT PANY

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHOENIX INVESTMENT PANY are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, PHOENIX INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with LUX ISLAND and PHOENIX INVESTMENT

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

The idea behind LUX ISLAND RESORTS and PHOENIX INVESTMENT PANY 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.