Correlation Between CEOTRONICS and Phillips

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

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

Diversification Opportunities for CEOTRONICS and Phillips

0.05

Correlation Coefficient

CEOTRONICS  Phillips

Significant diversification

The 3 months correlation between CEOTRONICS and Phillips is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and Phillips 66 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips 66 and CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS i.e., CEOTRONICS and Phillips go up and down completely randomly.

Pair Corralation between CEOTRONICS and Phillips

Assuming the 90 days trading horizon CEOTRONICS is expected to under-perform the Phillips. In addition to that, CEOTRONICS is 1.79 times more volatile than Phillips 66. It trades about -0.03 of its total potential returns per unit of risk. Phillips 66 is currently generating about 0.13 per unit of volatility. If you would invest  8,973  in Phillips 66 on April 23, 2025 and sell it today you would earn a total of  1,753  from holding Phillips 66 or generate 19.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CEOTRONICS  vs.  Phillips 66

CEOTRONICS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CEOTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Phillips 66

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips 66 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Phillips reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEOTRONICS and Phillips

The main advantage of trading using opposite CEOTRONICS and Phillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS 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 CEOTRONICS 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.