Correlation Between LCI Industries and PHINIA

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

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

Diversification Opportunities for LCI Industries and PHINIA

0.57

Correlation Coefficient

LCI Industries  PHINIA

Very weak diversification

The 3 months correlation between LCI and PHINIA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding LCI Industries and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc and LCI Industries 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 LCI Industries are associated (or correlated) with PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of LCI Industries i.e., LCI Industries and PHINIA go up and down completely randomly.

Pair Corralation between LCI Industries and PHINIA

Given the investment horizon of 90 days LCI Industries is expected to under-perform the PHINIA. In addition to that, LCI Industries is 1.21 times more volatile than PHINIA Inc. It trades about -0.05 of its total potential returns per unit of risk. PHINIA Inc is currently generating about 0.02 per unit of volatility. If you would invest  5,359  in PHINIA Inc on July 26, 2025 and sell it today you would earn a total of  75.00  from holding PHINIA Inc or generate 1.4% return on investment over 90 days.

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

LCI Industries  vs.  PHINIA Inc

LCI Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days LCI Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, LCI Industries is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

PHINIA Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PHINIA Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, PHINIA is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with LCI Industries and PHINIA

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

The idea behind LCI Industries and PHINIA Inc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.