Correlation Between RM Plc and Phunware

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

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

Diversification Opportunities for RM Plc and Phunware

-0.47

Correlation Coefficient

RM Plc  Phunware

Very good diversification

The 3 months correlation between RM Plc and Phunware is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding RM Plc and Phunware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phunware and RM Plc 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 RM Plc are associated (or correlated) with Phunware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phunware has no effect on the direction of RM Plc i.e., RM Plc and Phunware go up and down completely randomly.

Pair Corralation between RM Plc and Phunware

Assuming the 90 days trading horizon RM Plc is expected to generate 3.42 times less return on investment than Phunware. But when comparing it to its historical volatility, RM Plc is 7.41 times less risky than Phunware. It trades about 0.07 of its potential returns per unit of risk. Phunware is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  745.00  in Phunware on August 6, 2025 and sell it today you would lose (515.00) from holding Phunware or give up 69.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.0%
Values	Daily Returns

RM Plc  vs.  Phunware

RM Plc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in RM Plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, RM Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Phunware

Risk-Adjusted Performance

Weakest

Over the last 90 days Phunware has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with RM Plc and Phunware

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

The idea behind RM Plc and Phunware 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..