Correlation Between Bunzl Plc and Pacific Ventures
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and Pacific Ventures 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 Bunzl Plc and Pacific Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and Pacific Ventures Group, you can compare the effects of market volatilities on Bunzl Plc and Pacific Ventures 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 Bunzl Plc with a short position of Pacific Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and Pacific Ventures.
Diversification Opportunities for Bunzl Plc and Pacific Ventures
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bunzl and Pacific is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and Pacific Ventures Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Ventures and Bunzl Plc 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 Bunzl plc are associated (or correlated) with Pacific Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Ventures has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and Pacific Ventures go up and down completely randomly.
Pair Corralation between Bunzl Plc and Pacific Ventures
Assuming the 90 days horizon Bunzl Plc is expected to generate 75.73 times less return on investment than Pacific Ventures. But when comparing it to its historical volatility, Bunzl plc is 75.08 times less risky than Pacific Ventures. It trades about 0.1 of its potential returns per unit of risk. Pacific Ventures Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Pacific Ventures Group on August 28, 2024 and sell it today you would earn a total of 0.06 from holding Pacific Ventures Group or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.4% |
| Values | Daily Returns |
Bunzl plc vs. Pacific Ventures Group
Performance |
| Timeline |
| Bunzl plc |
| Pacific Ventures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bunzl Plc and Pacific Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and Pacific Ventures
The main advantage of trading using opposite Bunzl Plc and Pacific Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, Pacific Ventures 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 Pacific Ventures will offset losses from the drop in Pacific Ventures' long position.| Bunzl Plc vs. Element Solutions | Bunzl Plc vs. Orion Engineered Carbons | Bunzl Plc vs. Minerals Technologies | Bunzl Plc vs. Ingevity Corp |
| Pacific Ventures vs. AMCON Distributing | Pacific Ventures vs. Colabor Group | Pacific Ventures vs. Bunzl plc | Pacific Ventures vs. Wanderport Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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