Correlation Between Pheton Holdings and Codan

Can any of the company-specific risk be diversified away by investing in both Pheton Holdings and Codan 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 Codan 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 Codan Limited, you can compare the effects of market volatilities on Pheton Holdings and Codan 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 Codan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pheton Holdings and Codan.

Diversification Opportunities for Pheton Holdings and Codan

0.32

Correlation Coefficient

Pheton Holdings  Codan

Weak diversification

The 3 months correlation between Pheton and Codan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pheton Holdings Ltd and Codan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codan Limited 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 Codan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codan Limited has no effect on the direction of Pheton Holdings i.e., Pheton Holdings and Codan go up and down completely randomly.

Pair Corralation between Pheton Holdings and Codan

Given the investment horizon of 90 days Pheton Holdings is expected to generate 1.17 times less return on investment than Codan. In addition to that, Pheton Holdings is 2.89 times more volatile than Codan Limited. It trades about 0.04 of its total potential returns per unit of risk. Codan Limited is currently generating about 0.13 per unit of volatility. If you would invest  730.00  in Codan Limited on May 13, 2025 and sell it today you would earn a total of  329.00  from holding Codan Limited or generate 45.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Pheton Holdings Ltd  vs.  Codan Limited

Pheton Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Pheton Holdings Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical indicators, Pheton Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Codan Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Codan Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Codan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pheton Holdings and Codan

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

The idea behind Pheton Holdings Ltd and Codan Limited 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.