Correlation Between Phoenix New and Dolphin Entertainment

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Can any of the company-specific risk be diversified away by investing in both Phoenix New and Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment, you can compare the effects of market volatilities on Phoenix New and Dolphin Entertainment 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 Dolphin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and Dolphin Entertainment.

Diversification Opportunities for Phoenix New and Dolphin Entertainment

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Phoenix and Dolphin is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment 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 Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Phoenix New i.e., Phoenix New and Dolphin Entertainment go up and down completely randomly.

Pair Corralation between Phoenix New and Dolphin Entertainment

Given the investment horizon of 90 days Phoenix New Media is expected to generate 1.29 times more return on investment than Dolphin Entertainment. However, Phoenix New is 1.29 times more volatile than Dolphin Entertainment. It trades about 0.01 of its potential returns per unit of risk. Dolphin Entertainment is currently generating about 0.0 per unit of risk. If you would invest  221.00  in Phoenix New Media on December 30, 2023 and sell it today you would lose (27.00) from holding Phoenix New Media or give up 12.22% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Phoenix New Media  vs.  Dolphin Entertainment

 Performance 
       Timeline  
Phoenix New Media 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix New Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Phoenix New reported solid returns over the last few months and may actually be approaching a breakup point.
Dolphin Entertainment 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Phoenix New and Dolphin Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Phoenix New and Dolphin Entertainment

The main advantage of trading using opposite Phoenix New and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New position performs unexpectedly, Dolphin Entertainment 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.
The idea behind Phoenix New Media and Dolphin Entertainment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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