Correlation Between Pacific Bay and Advent Wireless

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

Diversification Opportunities for Pacific Bay and Advent Wireless

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Pacific and Advent is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Bay Minerals and Advent Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Wireless and Pacific Bay 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 Bay Minerals are associated (or correlated) with Advent Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Wireless has no effect on the direction of Pacific Bay i.e., Pacific Bay and Advent Wireless go up and down completely randomly.

Pair Corralation between Pacific Bay and Advent Wireless

If you would invest (100.00) in Advent Wireless on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Advent Wireless or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Pacific Bay Minerals  vs.  Advent Wireless

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 20406080
JavaScript chart by amCharts 3.21.15PBM AWI
       Timeline  
Pacific Bay Minerals 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Bay Minerals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pacific Bay showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar0.040.050.060.070.080.09
Advent Wireless 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Advent Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pacific Bay and Advent Wireless Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-39.82-29.82-19.83-9.830.010.2720.5430.8141.07 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15PBM AWI
       Returns  

Pair Trading with Pacific Bay and Advent Wireless

The main advantage of trading using opposite Pacific Bay and Advent Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Bay position performs unexpectedly, Advent Wireless 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 Advent Wireless will offset losses from the drop in Advent Wireless' long position.
The idea behind Pacific Bay Minerals and Advent Wireless 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.
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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