Correlation Between TRAVEL LEISURE and FONIX MOBILE

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and FONIX MOBILE PLC, you can compare the effects of market volatilities on TRAVEL LEISURE and FONIX MOBILE 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 TRAVEL LEISURE with a short position of FONIX MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL LEISURE and FONIX MOBILE.

Diversification Opportunities for TRAVEL LEISURE and FONIX MOBILE

-0.34

Correlation Coefficient

TRAVEL LEISURE  FONIX MOBILE

Very good diversification

The 3 months correlation between TRAVEL and FONIX is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC and TRAVEL LEISURE 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 TRAVEL LEISURE DL 01 are associated (or correlated) with FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of TRAVEL LEISURE i.e., TRAVEL LEISURE and FONIX MOBILE go up and down completely randomly.

Pair Corralation between TRAVEL LEISURE and FONIX MOBILE

Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 1.08 times more return on investment than FONIX MOBILE. However, TRAVEL LEISURE is 1.08 times more volatile than FONIX MOBILE PLC. It trades about 0.14 of its potential returns per unit of risk. FONIX MOBILE PLC is currently generating about -0.06 per unit of risk. If you would invest  4,271  in TRAVEL LEISURE DL 01 on May 12, 2025 and sell it today you would earn a total of  779.00  from holding TRAVEL LEISURE DL 01 or generate 18.24% return on investment over 90 days.

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

TRAVEL LEISURE DL 01  vs.  FONIX MOBILE PLC

TRAVEL LEISURE DL

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAVEL LEISURE reported solid returns over the last few months and may actually be approaching a breakup point.

FONIX MOBILE PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days FONIX MOBILE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TRAVEL LEISURE and FONIX MOBILE

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

The idea behind TRAVEL LEISURE DL 01 and FONIX MOBILE PLC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.