Correlation Between Pacific Pipe and Country Group
Can any of the company-specific risk be diversified away by investing in both Pacific Pipe and Country 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 Pacific Pipe and Country Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Pipe Public and Country Group Holdings, you can compare the effects of market volatilities on Pacific Pipe and Country 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 Pacific Pipe with a short position of Country Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Pipe and Country Group.
Diversification Opportunities for Pacific Pipe and Country Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and Country is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Pipe Public and Country Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Group Holdings and Pacific Pipe 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 Pacific Pipe Public are associated (or correlated) with Country Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Group Holdings has no effect on the direction of Pacific Pipe i.e., Pacific Pipe and Country Group go up and down completely randomly.
Pair Corralation between Pacific Pipe and Country Group
Assuming the 90 days trading horizon Pacific Pipe Public is expected to under-perform the Country Group. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Pipe Public is 19.7 times less risky than Country Group. The stock trades about -0.05 of its potential returns per unit of risk. The Country Group Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Country Group Holdings on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Country Group Holdings or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Pipe Public vs. Country Group Holdings
Performance |
| Timeline |
| Pacific Pipe Public |
| Country Group Holdings |
Pacific Pipe and Country Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Pipe and Country Group
The main advantage of trading using opposite Pacific Pipe and Country Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Pipe position performs unexpectedly, Country 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 Country Group will offset losses from the drop in Country Group's long position.| Pacific Pipe vs. 2S Metal Public | Pacific Pipe vs. AAPICO Hitech Public | Pacific Pipe vs. AJ Plast Public |
| Country Group vs. Asia Plus Group | Country Group vs. Globlex Holding Management | Country Group vs. Asia Green Energy | Country Group vs. Amanah Leasing Public |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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