Correlation Between Pacific Strategic and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Communication Cable 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 Pacific Strategic and Communication Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Strategic Financial and Communication Cable Systems, you can compare the effects of market volatilities on Pacific Strategic and Communication Cable 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 Pacific Strategic with a short position of Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Communication Cable.
Diversification Opportunities for Pacific Strategic and Communication Cable
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pacific and Communication is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable and Pacific Strategic 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 Pacific Strategic Financial are associated (or correlated) with Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Communication Cable go up and down completely randomly.
Pair Corralation between Pacific Strategic and Communication Cable
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to generate 0.51 times more return on investment than Communication Cable. However, Pacific Strategic Financial is 1.96 times less risky than Communication Cable. It trades about -0.03 of its potential returns per unit of risk. Communication Cable Systems is currently generating about -0.09 per unit of risk. If you would invest 117,500 in Pacific Strategic Financial on September 2, 2024 and sell it today you would lose (16,000) from holding Pacific Strategic Financial or give up 13.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Communication Cable Systems
Performance |
| Timeline |
| Pacific Strategic |
| Communication Cable |
Pacific Strategic and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Communication Cable
The main advantage of trading using opposite Pacific Strategic and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable's long position.| Pacific Strategic vs. Asuransi Harta Aman | Pacific Strategic vs. Asuransi Bintang Tbk | Pacific Strategic vs. Mnc Kapital Indonesia | Pacific Strategic vs. Arthavest Tbk |
| Communication Cable vs. Berkah Prima Perkasa | Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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