Correlation Between PCF Group and Wielton SA
Can any of the company-specific risk be diversified away by investing in both PCF Group and Wielton SA 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 Wielton SA 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 Wielton SA, you can compare the effects of market volatilities on PCF Group and Wielton SA 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 Wielton SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCF Group and Wielton SA.
Diversification Opportunities for PCF Group and Wielton SA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PCF and Wielton is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding PCF Group SA and Wielton SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wielton SA 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 Wielton SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wielton SA has no effect on the direction of PCF Group i.e., PCF Group and Wielton SA go up and down completely randomly.
Pair Corralation between PCF Group and Wielton SA
Assuming the 90 days trading horizon PCF Group SA is expected to under-perform the Wielton SA. In addition to that, PCF Group is 1.42 times more volatile than Wielton SA. It trades about -0.24 of its total potential returns per unit of risk. Wielton SA is currently generating about -0.18 per unit of volatility. If you would invest 806.00 in Wielton SA on August 26, 2024 and sell it today you would lose (259.00) from holding Wielton SA or give up 32.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCF Group SA vs. Wielton SA
Performance |
| Timeline |
| PCF Group SA |
| Wielton SA |
PCF Group and Wielton SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCF Group and Wielton SA
The main advantage of trading using opposite PCF Group and Wielton SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCF Group position performs unexpectedly, Wielton SA 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 Wielton SA will offset losses from the drop in Wielton SA's long position.| PCF Group vs. Banco Santander SA | PCF Group vs. UniCredit SpA | PCF Group vs. CEZ as | PCF Group vs. Polski Koncern Naftowy |
| Wielton SA vs. Medicalg | Wielton SA vs. Ultimate Games SA | Wielton SA vs. Echo Investment SA | Wielton SA vs. True Games Syndicate |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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