Correlation Between Cairn Homes and Phoenix Spree

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

By analyzing existing cross correlation between Cairn Homes PLC and Phoenix Spree Deutschland, you can compare the effects of market volatilities on Cairn Homes and Phoenix Spree 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 Cairn Homes with a short position of Phoenix Spree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and Phoenix Spree.

Diversification Opportunities for Cairn Homes and Phoenix Spree

0.13

Correlation Coefficient

Cairn Homes  Phoenix Spree

Average diversification

The 3 months correlation between Cairn and Phoenix is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and Phoenix Spree Deutschland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Spree Deutschland and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with Phoenix Spree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Spree Deutschland has no effect on the direction of Cairn Homes i.e., Cairn Homes and Phoenix Spree go up and down completely randomly.

Pair Corralation between Cairn Homes and Phoenix Spree

Assuming the 90 days trading horizon Cairn Homes PLC is expected to generate 1.25 times more return on investment than Phoenix Spree. However, Cairn Homes is 1.25 times more volatile than Phoenix Spree Deutschland. It trades about 0.14 of its potential returns per unit of risk. Phoenix Spree Deutschland is currently generating about 0.01 per unit of risk. If you would invest  15,960  in Cairn Homes PLC on April 24, 2025 and sell it today you would earn a total of  2,980  from holding Cairn Homes PLC or generate 18.67% return on investment over 90 days.

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

Cairn Homes PLC  vs.  Phoenix Spree Deutschland

Cairn Homes PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cairn Homes PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Cairn Homes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Phoenix Spree Deutschland

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phoenix Spree Deutschland has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Phoenix Spree is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cairn Homes and Phoenix Spree

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

The idea behind Cairn Homes PLC and Phoenix Spree Deutschland 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..