Correlation Between MW Trade and PCF Group
Can any of the company-specific risk be diversified away by investing in both MW Trade 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 MW Trade and PCF Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MW Trade SA and PCF Group SA, you can compare the effects of market volatilities on MW Trade 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 MW Trade with a short position of PCF Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and PCF Group.
Diversification Opportunities for MW Trade and PCF Group
Almost no diversification
The 3 months correlation between MWT and PCF is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade SA 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 MW Trade 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 MW Trade SA 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 MW Trade i.e., MW Trade and PCF Group go up and down completely randomly.
Pair Corralation between MW Trade and PCF Group
Assuming the 90 days trading horizon MW Trade SA is expected to generate 0.48 times more return on investment than PCF Group. However, MW Trade SA is 2.09 times less risky than PCF Group. It trades about -0.45 of its potential returns per unit of risk. PCF Group SA is currently generating about -0.29 per unit of risk. If you would invest 394.00 in MW Trade SA on August 28, 2024 and sell it today you would lose (54.00) from holding MW Trade SA or give up 13.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MW Trade SA vs. PCF Group SA
Performance |
| Timeline |
| MW Trade SA |
| PCF Group SA |
MW Trade and PCF Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and PCF Group
The main advantage of trading using opposite MW Trade and PCF Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW Trade 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.| MW Trade vs. Asseco Business Solutions | MW Trade vs. Detalion Games SA | MW Trade vs. Asseco South Eastern | MW Trade vs. CFI Holding SA |
| PCF Group vs. PLAYWAY SA | PCF Group vs. Movie Games SA | PCF Group vs. Santander Bank Polska | PCF Group vs. Bank Millennium SA |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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