Correlation Between Beta MWIG40TR and PCF Group

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Can any of the company-specific risk be diversified away by investing in both Beta MWIG40TR and PCF Group 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 Beta MWIG40TR and PCF Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beta mWIG40TR Portfelowy and PCF Group SA, you can compare the effects of market volatilities on Beta MWIG40TR and PCF Group 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 Beta MWIG40TR with a short position of PCF Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta MWIG40TR and PCF Group.

Diversification Opportunities for Beta MWIG40TR and PCF Group

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Beta and PCF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Beta mWIG40TR Portfelowy and PCF Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCF Group SA and Beta MWIG40TR 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 Beta mWIG40TR Portfelowy are associated (or correlated) with PCF Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCF Group SA has no effect on the direction of Beta MWIG40TR i.e., Beta MWIG40TR and PCF Group go up and down completely randomly.

Pair Corralation between Beta MWIG40TR and PCF Group

Assuming the 90 days trading horizon Beta mWIG40TR Portfelowy is expected to generate 0.34 times more return on investment than PCF Group. However, Beta mWIG40TR Portfelowy is 2.95 times less risky than PCF Group. It trades about 0.1 of its potential returns per unit of risk. PCF Group SA is currently generating about -0.09 per unit of risk. If you would invest  6,416  in Beta mWIG40TR Portfelowy on November 2, 2024 and sell it today you would earn a total of  3,842  from holding Beta mWIG40TR Portfelowy or generate 59.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.59%
ValuesDaily Returns

Beta mWIG40TR Portfelowy  vs.  PCF Group SA

 Performance 
       Timeline  
Beta mWIG40TR Portfelowy 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Beta mWIG40TR Portfelowy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta MWIG40TR may actually be approaching a critical reversion point that can send shares even higher in March 2025.
PCF Group SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PCF Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Beta MWIG40TR and PCF Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beta MWIG40TR and PCF Group

The main advantage of trading using opposite Beta MWIG40TR and PCF Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta MWIG40TR position performs unexpectedly, PCF Group 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 PCF Group will offset losses from the drop in PCF Group's long position.
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The idea behind Beta mWIG40TR Portfelowy and PCF Group SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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