Correlation Between Fenix Outdoor and Bawat Water

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

By analyzing existing cross correlation between Fenix Outdoor International and Bawat Water Technologies, you can compare the effects of market volatilities on Fenix Outdoor and Bawat Water 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 Fenix Outdoor with a short position of Bawat Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenix Outdoor and Bawat Water.

Diversification Opportunities for Fenix Outdoor and Bawat Water

0.71

Correlation Coefficient

Fenix Outdoor  Bawat Water

Poor diversification

The 3 months correlation between Fenix and Bawat is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fenix Outdoor International and Bawat Water Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bawat Water Technologies and Fenix Outdoor 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 Fenix Outdoor International are associated (or correlated) with Bawat Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bawat Water Technologies has no effect on the direction of Fenix Outdoor i.e., Fenix Outdoor and Bawat Water go up and down completely randomly.

Pair Corralation between Fenix Outdoor and Bawat Water

Assuming the 90 days trading horizon Fenix Outdoor International is expected to under-perform the Bawat Water. But the stock apears to be less risky and, when comparing its historical volatility, Fenix Outdoor International is 4.02 times less risky than Bawat Water. The stock trades about -0.1 of its potential returns per unit of risk. The Bawat Water Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Bawat Water Technologies on April 23, 2025 and sell it today you would lose (21.00) from holding Bawat Water Technologies or give up 23.08% of portfolio value over 90 days.

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

Fenix Outdoor International  vs.  Bawat Water Technologies

Fenix Outdoor Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fenix Outdoor International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Bawat Water Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bawat Water Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Fenix Outdoor and Bawat Water

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

The idea behind Fenix Outdoor International and Bawat Water Technologies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.