Correlation Between Advanced Micro and Phillips

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

By analyzing existing cross correlation between Advanced Micro Devices and Phillips 66, you can compare the effects of market volatilities on Advanced Micro and Phillips 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 Advanced Micro with a short position of Phillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Phillips.

Diversification Opportunities for Advanced Micro and Phillips

0.31

Correlation Coefficient

Advanced Micro  Phillips

Weak diversification

The 3 months correlation between Advanced and Phillips is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Phillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips 66 has no effect on the direction of Advanced Micro i.e., Advanced Micro and Phillips go up and down completely randomly.

Pair Corralation between Advanced Micro and Phillips

Assuming the 90 days trading horizon Advanced Micro Devices is expected to generate 3.19 times more return on investment than Phillips. However, Advanced Micro is 3.19 times more volatile than Phillips 66. It trades about 0.11 of its potential returns per unit of risk. Phillips 66 is currently generating about 0.03 per unit of risk. If you would invest  3,017  in Advanced Micro Devices on August 30, 2025 and sell it today you would earn a total of  914.00  from holding Advanced Micro Devices or generate 30.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Advanced Micro Devices  vs.  Phillips 66

Advanced Micro Devices

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Advanced Micro displayed solid returns over the last few months and may actually be approaching a breakup point.

Phillips 66

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips 66 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Phillips is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advanced Micro and Phillips

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

The idea behind Advanced Micro Devices and Phillips 66 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.