Correlation Between Pheton Holdings and ABB

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

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

Diversification Opportunities for Pheton Holdings and ABB

0.54

Correlation Coefficient

Pheton Holdings  ABB

Very weak diversification

The 3 months correlation between Pheton and ABB is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pheton Holdings Ltd and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB and Pheton Holdings 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 Pheton Holdings Ltd are associated (or correlated) with ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Pheton Holdings i.e., Pheton Holdings and ABB go up and down completely randomly.

Pair Corralation between Pheton Holdings and ABB

Given the investment horizon of 90 days Pheton Holdings Ltd is expected to generate 7.3 times more return on investment than ABB. However, Pheton Holdings is 7.3 times more volatile than ABB. It trades about 0.08 of its potential returns per unit of risk. ABB is currently generating about 0.14 per unit of risk. If you would invest  376.00  in Pheton Holdings Ltd on May 4, 2025 and sell it today you would lose (295.00) from holding Pheton Holdings Ltd or give up 78.46% of portfolio value over 90 days.

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

Pheton Holdings Ltd  vs.  ABB

Pheton Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pheton Holdings Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Pheton Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

ABB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ABB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ABB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pheton Holdings and ABB

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

The idea behind Pheton Holdings Ltd and ABB 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.