Correlation Between Pacificonline Systems and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both Pacificonline Systems and Figaro Coffee 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 Pacificonline Systems and Figaro Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacificonline Systems and Figaro Coffee Group, you can compare the effects of market volatilities on Pacificonline Systems and Figaro Coffee 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 Pacificonline Systems with a short position of Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacificonline Systems and Figaro Coffee.
Diversification Opportunities for Pacificonline Systems and Figaro Coffee
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacificonline and Figaro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pacificonline Systems and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group and Pacificonline Systems 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 Pacificonline Systems are associated (or correlated) with Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of Pacificonline Systems i.e., Pacificonline Systems and Figaro Coffee go up and down completely randomly.
Pair Corralation between Pacificonline Systems and Figaro Coffee
Assuming the 90 days trading horizon Pacificonline Systems is expected to generate 1.49 times more return on investment than Figaro Coffee. However, Pacificonline Systems is 1.49 times more volatile than Figaro Coffee Group. It trades about 0.06 of its potential returns per unit of risk. Figaro Coffee Group is currently generating about 0.03 per unit of risk. If you would invest 146.00 in Pacificonline Systems on August 24, 2024 and sell it today you would earn a total of 153.00 from holding Pacificonline Systems or generate 104.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.03% |
| Values | Daily Returns |
Pacificonline Systems vs. Figaro Coffee Group
Performance |
| Timeline |
| Pacificonline Systems |
| Figaro Coffee Group |
Pacificonline Systems and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacificonline Systems and Figaro Coffee
The main advantage of trading using opposite Pacificonline Systems and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacificonline Systems position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| Pacificonline Systems vs. Metropolitan Bank Trust | Pacificonline Systems vs. Lepanto Consolidated Mining | Pacificonline Systems vs. Allhome Corp | Pacificonline Systems vs. Suntrust Home Developers |
| Figaro Coffee vs. Pacificonline Systems | Figaro Coffee vs. Allhome Corp | Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. LFM Properties 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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