Correlation Between Afcon Holdings and PCB Tec
Can any of the company-specific risk be diversified away by investing in both Afcon Holdings and PCB Tec 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 Afcon Holdings and PCB Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afcon Holdings and PCB Tec, you can compare the effects of market volatilities on Afcon Holdings and PCB Tec 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 Afcon Holdings with a short position of PCB Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afcon Holdings and PCB Tec.
Diversification Opportunities for Afcon Holdings and PCB Tec
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Afcon and PCB is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Afcon Holdings and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec and Afcon 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 Afcon Holdings are associated (or correlated) with PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Afcon Holdings i.e., Afcon Holdings and PCB Tec go up and down completely randomly.
Pair Corralation between Afcon Holdings and PCB Tec
Assuming the 90 days trading horizon Afcon Holdings is expected to generate 156.95 times less return on investment than PCB Tec. But when comparing it to its historical volatility, Afcon Holdings is 1.58 times less risky than PCB Tec. It trades about 0.0 of its potential returns per unit of risk. PCB Tec is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 25,054 in PCB Tec on September 3, 2024 and sell it today you would earn a total of 44,686 from holding PCB Tec or generate 178.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Afcon Holdings vs. PCB Tec
Performance |
| Timeline |
| Afcon Holdings |
| PCB Tec |
Afcon Holdings and PCB Tec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Afcon Holdings and PCB Tec
The main advantage of trading using opposite Afcon Holdings and PCB Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afcon Holdings position performs unexpectedly, PCB Tec 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 PCB Tec will offset losses from the drop in PCB Tec's long position.| Afcon Holdings vs. Hilan | Afcon Holdings vs. Matrix | Afcon Holdings vs. AudioCodes | Afcon Holdings vs. Tadiran Hldg |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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