Correlation Between PHX Energy and IBC Advanced

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

By analyzing existing cross correlation between PHX Energy Services and IBC Advanced Alloys, you can compare the effects of market volatilities on PHX Energy and IBC Advanced 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 PHX Energy with a short position of IBC Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Energy and IBC Advanced.

Diversification Opportunities for PHX Energy and IBC Advanced

-0.73

Correlation Coefficient

PHX Energy  IBC Advanced

Pay attention - limited upside

The 3 months correlation between PHX and IBC is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PHX Energy Services and IBC Advanced Alloys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBC Advanced Alloys and PHX Energy 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 PHX Energy Services are associated (or correlated) with IBC Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBC Advanced Alloys has no effect on the direction of PHX Energy i.e., PHX Energy and IBC Advanced go up and down completely randomly.

Pair Corralation between PHX Energy and IBC Advanced

Assuming the 90 days trading horizon PHX Energy Services is expected to generate 0.22 times more return on investment than IBC Advanced. However, PHX Energy Services is 4.6 times less risky than IBC Advanced. It trades about 0.1 of its potential returns per unit of risk. IBC Advanced Alloys is currently generating about -0.05 per unit of risk. If you would invest  754.00  in PHX Energy Services on April 24, 2025 and sell it today you would earn a total of  68.00  from holding PHX Energy Services or generate 9.02% return on investment over 90 days.

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

PHX Energy Services  vs.  IBC Advanced Alloys

PHX Energy Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHX Energy Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, PHX Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

IBC Advanced Alloys

Risk-Adjusted Performance

Very Weak

Over the last 90 days IBC Advanced Alloys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with PHX Energy and IBC Advanced

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

The idea behind PHX Energy Services and IBC Advanced Alloys 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.