Correlation Between Phinergy and Energix Renewable

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

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

Diversification Opportunities for Phinergy and Energix Renewable

-0.23

Correlation Coefficient

Phinergy  Energix Renewable

Very good diversification

The 3 months correlation between Phinergy and Energix is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Phinergy and Energix Renewable Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energix Renewable and Phinergy 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 Phinergy are associated (or correlated) with Energix Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energix Renewable has no effect on the direction of Phinergy i.e., Phinergy and Energix Renewable go up and down completely randomly.

Pair Corralation between Phinergy and Energix Renewable

Assuming the 90 days trading horizon Phinergy is expected to under-perform the Energix Renewable. In addition to that, Phinergy is 2.56 times more volatile than Energix Renewable Energies. It trades about -0.13 of its total potential returns per unit of risk. Energix Renewable Energies is currently generating about 0.25 per unit of volatility. If you would invest  140,100  in Energix Renewable Energies on February 26, 2024 and sell it today you would earn a total of  7,100  from holding Energix Renewable Energies or generate 5.07% return on investment over 90 days.

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

Phinergy  vs.  Energix Renewable Energies

Phinergy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phinergy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Phinergy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Energix Renewable

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Energix Renewable Energies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Energix Renewable sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phinergy and Energix Renewable

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

The idea behind Phinergy and Energix Renewable Energies 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .