Correlation Between Phenixfin and Great Elm

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

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

Diversification Opportunities for Phenixfin and Great Elm

-0.17

Correlation Coefficient

Phenixfin  Great Elm

Good diversification

The 3 months correlation between Phenixfin and Great is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Phenixfin and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and Phenixfin 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 Phenixfin are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Phenixfin i.e., Phenixfin and Great Elm go up and down completely randomly.

Pair Corralation between Phenixfin and Great Elm

Considering the 90-day investment horizon Phenixfin is expected to generate 2.11 times more return on investment than Great Elm. However, Phenixfin is 2.11 times more volatile than Great Elm Capital. It trades about 0.11 of its potential returns per unit of risk. Great Elm Capital is currently generating about 0.05 per unit of risk. If you would invest  4,938  in Phenixfin on May 5, 2025 and sell it today you would earn a total of  89.00  from holding Phenixfin or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Phenixfin  vs.  Great Elm Capital

Phenixfin

Risk-Adjusted Performance

Insignificant

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

Great Elm Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Great Elm Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Great Elm exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phenixfin and Great Elm

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

The idea behind Phenixfin and Great Elm Capital 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 CEOs Directory module to screen CEOs from public companies around the world.