Correlation Between PCI PAL and Saga Plc
Can any of the company-specific risk be diversified away by investing in both PCI PAL and Saga Plc 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 PCI PAL and Saga Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCI PAL PLC and Saga plc, you can compare the effects of market volatilities on PCI PAL and Saga Plc 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 PCI PAL with a short position of Saga Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCI PAL and Saga Plc.
Diversification Opportunities for PCI PAL and Saga Plc
Very good diversification
The 3 months correlation between PCI and Saga is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PCI PAL PLC and Saga plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga plc and PCI PAL 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 PCI PAL PLC are associated (or correlated) with Saga Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga plc has no effect on the direction of PCI PAL i.e., PCI PAL and Saga Plc go up and down completely randomly.
Pair Corralation between PCI PAL and Saga Plc
Assuming the 90 days trading horizon PCI PAL PLC is expected to under-perform the Saga Plc. But the stock apears to be less risky and, when comparing its historical volatility, PCI PAL PLC is 1.5 times less risky than Saga Plc. The stock trades about -0.13 of its potential returns per unit of risk. The Saga plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,300 in Saga plc on September 3, 2024 and sell it today you would earn a total of 80.00 from holding Saga plc or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PCI PAL PLC vs. Saga plc
Performance |
| Timeline |
| PCI PAL PLC |
| Saga plc |
PCI PAL and Saga Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCI PAL and Saga Plc
The main advantage of trading using opposite PCI PAL and Saga Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCI PAL position performs unexpectedly, Saga Plc 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 Saga Plc will offset losses from the drop in Saga Plc's long position.| PCI PAL vs. LPKF Laser Electronics | PCI PAL vs. Liberty Media Corp | PCI PAL vs. Synthomer plc | PCI PAL vs. Zinc Media Group |
| Saga Plc vs. Veolia Environnement VE | Saga Plc vs. Austevoll Seafood ASA | Saga Plc vs. Aeorema Communications Plc | Saga Plc vs. Edita Food Industries |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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