Correlation Between Pfeiffer Vacuum and Power Metal
Can any of the company-specific risk be diversified away by investing in both Pfeiffer Vacuum and Power Metal 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 Pfeiffer Vacuum and Power Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfeiffer Vacuum Technology and Power Metal Resources, you can compare the effects of market volatilities on Pfeiffer Vacuum and Power Metal 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 Pfeiffer Vacuum with a short position of Power Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfeiffer Vacuum and Power Metal.
Diversification Opportunities for Pfeiffer Vacuum and Power Metal
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pfeiffer and Power is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pfeiffer Vacuum Technology and Power Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metal Resources and Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology are associated (or correlated) with Power Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metal Resources has no effect on the direction of Pfeiffer Vacuum i.e., Pfeiffer Vacuum and Power Metal go up and down completely randomly.
Pair Corralation between Pfeiffer Vacuum and Power Metal
Assuming the 90 days trading horizon Pfeiffer Vacuum is expected to generate 2.8 times less return on investment than Power Metal. But when comparing it to its historical volatility, Pfeiffer Vacuum Technology is 9.38 times less risky than Power Metal. It trades about 0.07 of its potential returns per unit of risk. Power Metal Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,400 in Power Metal Resources on September 19, 2024 and sell it today you would lose (25.00) from holding Power Metal Resources or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfeiffer Vacuum Technology vs. Power Metal Resources
Performance |
| Timeline |
| Pfeiffer Vacuum Tech |
| Power Metal Resources |
Pfeiffer Vacuum and Power Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfeiffer Vacuum and Power Metal
The main advantage of trading using opposite Pfeiffer Vacuum and Power Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfeiffer Vacuum position performs unexpectedly, Power Metal 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 Power Metal will offset losses from the drop in Power Metal's long position.| Pfeiffer Vacuum vs. Monster Beverage Corp | Pfeiffer Vacuum vs. Evolution Gaming Group | Pfeiffer Vacuum vs. Blackstone Loan Financing | Pfeiffer Vacuum vs. Young Cos Brewery |
| Power Metal vs. Take Two Interactive Software | Power Metal vs. Pfeiffer Vacuum Technology | Power Metal vs. Gruppo MutuiOnline SpA | Power Metal vs. Microchip Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |