Correlation Between Encore Capital and PAVmed Series
Can any of the company-specific risk be diversified away by investing in both Encore Capital and PAVmed Series 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 Encore Capital and PAVmed Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and PAVmed Series Z, you can compare the effects of market volatilities on Encore Capital and PAVmed Series 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 Encore Capital with a short position of PAVmed Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and PAVmed Series.
Diversification Opportunities for Encore Capital and PAVmed Series
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Encore and PAVmed is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and PAVmed Series Z in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed Series Z and Encore Capital 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 Encore Capital Group are associated (or correlated) with PAVmed Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Series Z has no effect on the direction of Encore Capital i.e., Encore Capital and PAVmed Series go up and down completely randomly.
Pair Corralation between Encore Capital and PAVmed Series
Given the investment horizon of 90 days Encore Capital is expected to generate 6.41 times less return on investment than PAVmed Series. But when comparing it to its historical volatility, Encore Capital Group is 34.61 times less risky than PAVmed Series. It trades about 0.2 of its potential returns per unit of risk. PAVmed Series Z is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.97 in PAVmed Series Z on September 1, 2024 and sell it today you would lose (2.46) from holding PAVmed Series Z or give up 61.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
Encore Capital Group vs. PAVmed Series Z
Performance |
| Timeline |
| Encore Capital Group |
| PAVmed Series Z |
Encore Capital and PAVmed Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and PAVmed Series
The main advantage of trading using opposite Encore Capital and PAVmed Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, PAVmed Series 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 PAVmed Series will offset losses from the drop in PAVmed Series' long position.| Encore Capital vs. 360 Finance | Encore Capital vs. Atlanticus Holdings | Encore Capital vs. Qudian Inc | Encore Capital vs. Enova International |
| PAVmed Series vs. SEI Investments | PAVmed Series vs. BTB Real Estate | PAVmed Series vs. Comstock Holding Companies | PAVmed Series vs. Chiba Bank Ltd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |