Correlation Between BH Co and PNC Technologies
Can any of the company-specific risk be diversified away by investing in both BH Co and PNC Technologies 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 BH Co and PNC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BH Co and PNC Technologies co, you can compare the effects of market volatilities on BH Co and PNC Technologies 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 BH Co with a short position of PNC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of BH Co and PNC Technologies.
Diversification Opportunities for BH Co and PNC Technologies
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 090460 and PNC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BH Co and PNC Technologies co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Technologies and BH Co 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 BH Co are associated (or correlated) with PNC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Technologies has no effect on the direction of BH Co i.e., BH Co and PNC Technologies go up and down completely randomly.
Pair Corralation between BH Co and PNC Technologies
Assuming the 90 days trading horizon BH Co is expected to generate 0.98 times more return on investment than PNC Technologies. However, BH Co is 1.02 times less risky than PNC Technologies. It trades about 0.03 of its potential returns per unit of risk. PNC Technologies co is currently generating about -0.05 per unit of risk. If you would invest 1,576,000 in BH Co on September 13, 2024 and sell it today you would earn a total of 15,000 from holding BH Co or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BH Co vs. PNC Technologies co
Performance |
| Timeline |
| BH Co |
| PNC Technologies |
BH Co and PNC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BH Co and PNC Technologies
The main advantage of trading using opposite BH Co and PNC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BH Co position performs unexpectedly, PNC Technologies 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 PNC Technologies will offset losses from the drop in PNC Technologies' long position.| BH Co vs. Cube Entertainment | BH Co vs. Dreamus Company | BH Co vs. LG Energy Solution | BH Co vs. Dongwon System |
| PNC Technologies vs. Daejoo Electronic Materials | PNC Technologies vs. Interflex Co | PNC Technologies vs. Solution Advanced Technology | PNC Technologies vs. Busan Industrial Co |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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