Correlation Between PCF Group and Pepco Group
Can any of the company-specific risk be diversified away by investing in both PCF Group and Pepco 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 PCF Group and Pepco Group 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 Pepco Group BV, you can compare the effects of market volatilities on PCF Group and Pepco 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 PCF Group with a short position of Pepco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCF Group and Pepco Group.
Diversification Opportunities for PCF Group and Pepco Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between PCF and Pepco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding PCF Group SA and Pepco Group BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pepco Group BV 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 Pepco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pepco Group BV has no effect on the direction of PCF Group i.e., PCF Group and Pepco Group go up and down completely randomly.
Pair Corralation between PCF Group and Pepco Group
Assuming the 90 days trading horizon PCF Group SA is expected to under-perform the Pepco Group. In addition to that, PCF Group is 1.53 times more volatile than Pepco Group BV. It trades about -0.31 of its total potential returns per unit of risk. Pepco Group BV is currently generating about -0.19 per unit of volatility. If you would invest 1,730 in Pepco Group BV on August 25, 2024 and sell it today you would lose (141.00) from holding Pepco Group BV or give up 8.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCF Group SA vs. Pepco Group BV
Performance |
| Timeline |
| PCF Group SA |
| Pepco Group BV |
PCF Group and Pepco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCF Group and Pepco Group
The main advantage of trading using opposite PCF Group and Pepco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCF Group position performs unexpectedly, Pepco 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 Pepco Group will offset losses from the drop in Pepco Group's long position.| PCF Group vs. mBank SA | PCF Group vs. Centrum Finansowe Banku | PCF Group vs. Immobile | PCF Group vs. MW Trade SA |
| Pepco Group vs. Asseco Business Solutions | Pepco Group vs. Detalion Games SA | Pepco Group vs. Asseco South Eastern | Pepco Group vs. Movie Games 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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