Correlation Between PNC Technologies and Microfriend
Can any of the company-specific risk be diversified away by investing in both PNC Technologies and Microfriend 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 PNC Technologies and Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNC Technologies co and Microfriend, you can compare the effects of market volatilities on PNC Technologies and Microfriend 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 PNC Technologies with a short position of Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Technologies and Microfriend.
Diversification Opportunities for PNC Technologies and Microfriend
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PNC and Microfriend is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PNC Technologies co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend and PNC Technologies 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 PNC Technologies co are associated (or correlated) with Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of PNC Technologies i.e., PNC Technologies and Microfriend go up and down completely randomly.
Pair Corralation between PNC Technologies and Microfriend
Assuming the 90 days trading horizon PNC Technologies co is expected to generate 0.64 times more return on investment than Microfriend. However, PNC Technologies co is 1.56 times less risky than Microfriend. It trades about -0.01 of its potential returns per unit of risk. Microfriend is currently generating about -0.02 per unit of risk. If you would invest 572,343 in PNC Technologies co on October 31, 2024 and sell it today you would lose (134,343) from holding PNC Technologies co or give up 23.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PNC Technologies co vs. Microfriend
Performance |
Timeline |
PNC Technologies |
Microfriend |
PNC Technologies and Microfriend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PNC Technologies and Microfriend
The main advantage of trading using opposite PNC Technologies and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Technologies position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.PNC Technologies vs. Daou Data Corp | PNC Technologies vs. NICE Information Service | PNC Technologies vs. Eagon Industrial Co | PNC Technologies vs. Nice Information Telecommunication |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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