Correlation Between PHINMA Corp and United Paragon

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

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

Diversification Opportunities for PHINMA Corp and United Paragon

0.06

Correlation Coefficient

PHINMA Corp  United Paragon

Significant diversification

The 3 months correlation between PHINMA and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PHINMA Corp and United Paragon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Paragon Mining and PHINMA Corp 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 PHINMA Corp are associated (or correlated) with United Paragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Paragon Mining has no effect on the direction of PHINMA Corp i.e., PHINMA Corp and United Paragon go up and down completely randomly.

Pair Corralation between PHINMA Corp and United Paragon

Assuming the 90 days trading horizon PHINMA Corp is expected to generate 0.39 times more return on investment than United Paragon. However, PHINMA Corp is 2.54 times less risky than United Paragon. It trades about 0.04 of its potential returns per unit of risk. United Paragon Mining is currently generating about -0.02 per unit of risk. If you would invest  1,743  in PHINMA Corp on April 22, 2025 and sell it today you would earn a total of  43.00  from holding PHINMA Corp or generate 2.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.93%
Values	Daily Returns

PHINMA Corp  vs.  United Paragon Mining

PHINMA Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PHINMA Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PHINMA Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

United Paragon Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Paragon Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, United Paragon is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PHINMA Corp and United Paragon

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

The idea behind PHINMA Corp and United Paragon Mining 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.