Correlation Between On Holding and Phoenix Footwear
Can any of the company-specific risk be diversified away by investing in both On Holding and Phoenix Footwear 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 On Holding and Phoenix Footwear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between On Holding and Phoenix Footwear Group, you can compare the effects of market volatilities on On Holding and Phoenix Footwear 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 On Holding with a short position of Phoenix Footwear. Check out your portfolio center. Please also check ongoing floating volatility patterns of On Holding and Phoenix Footwear.
Diversification Opportunities for On Holding and Phoenix Footwear
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ONON and Phoenix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding On Holding and Phoenix Footwear Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Footwear and On Holding 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 On Holding are associated (or correlated) with Phoenix Footwear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Footwear has no effect on the direction of On Holding i.e., On Holding and Phoenix Footwear go up and down completely randomly.
Pair Corralation between On Holding and Phoenix Footwear
If you would invest 4,988 in On Holding on September 16, 2024 and sell it today you would earn a total of 742.00 from holding On Holding or generate 14.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.54% |
Values | Daily Returns |
On Holding vs. Phoenix Footwear Group
Performance |
Timeline |
On Holding |
Phoenix Footwear |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
On Holding and Phoenix Footwear Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with On Holding and Phoenix Footwear
The main advantage of trading using opposite On Holding and Phoenix Footwear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if On Holding position performs unexpectedly, Phoenix Footwear 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 Footwear will offset losses from the drop in Phoenix Footwear's long position.The idea behind On Holding and Phoenix Footwear Group 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.Phoenix Footwear vs. Good Vibrations Shoes | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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