Correlation Between PCF Group and Balticon
Can any of the company-specific risk be diversified away by investing in both PCF Group and Balticon 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 PCF Group and Balticon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCF Group SA and Balticon, you can compare the effects of market volatilities on PCF Group and Balticon 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 PCF Group with a short position of Balticon. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCF Group and Balticon.
Diversification Opportunities for PCF Group and Balticon
Very weak diversification
The 3 months correlation between PCF and Balticon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PCF Group SA and Balticon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balticon and PCF Group 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 PCF Group SA are associated (or correlated) with Balticon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balticon has no effect on the direction of PCF Group i.e., PCF Group and Balticon go up and down completely randomly.
Pair Corralation between PCF Group and Balticon
Assuming the 90 days trading horizon PCF Group SA is expected to under-perform the Balticon. But the stock apears to be less risky and, when comparing its historical volatility, PCF Group SA is 1.1 times less risky than Balticon. The stock trades about -0.36 of its potential returns per unit of risk. The Balticon is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Balticon on August 30, 2024 and sell it today you would earn a total of 240.00 from holding Balticon or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
PCF Group SA vs. Balticon
Performance |
| Timeline |
| PCF Group SA |
| Balticon |
PCF Group and Balticon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCF Group and Balticon
The main advantage of trading using opposite PCF Group and Balticon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCF Group position performs unexpectedly, Balticon 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 Balticon will offset losses from the drop in Balticon's long position.| PCF Group vs. Saule Technologies SA | PCF Group vs. Tower Investments SA | PCF Group vs. Immobile | PCF Group vs. Igoria Trade SA |
| Balticon vs. LSI Software SA | Balticon vs. Road Studio SA | Balticon vs. SOFTWARE MANSION SPOLKA | Balticon vs. Enter Air 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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