Correlation Between Pepco Group and Notoria
Can any of the company-specific risk be diversified away by investing in both Pepco Group and Notoria 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 Pepco Group and Notoria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pepco Group BV and Notoria, you can compare the effects of market volatilities on Pepco Group and Notoria 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 Pepco Group with a short position of Notoria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pepco Group and Notoria.
Diversification Opportunities for Pepco Group and Notoria
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pepco and Notoria is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pepco Group BV and Notoria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Notoria and Pepco 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 Pepco Group BV are associated (or correlated) with Notoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Notoria has no effect on the direction of Pepco Group i.e., Pepco Group and Notoria go up and down completely randomly.
Pair Corralation between Pepco Group and Notoria
Assuming the 90 days trading horizon Pepco Group BV is expected to under-perform the Notoria. But the stock apears to be less risky and, when comparing its historical volatility, Pepco Group BV is 1.2 times less risky than Notoria. The stock trades about -0.08 of its potential returns per unit of risk. The Notoria is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 585.00 in Notoria on September 3, 2024 and sell it today you would earn a total of 230.00 from holding Notoria or generate 39.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Pepco Group BV vs. Notoria
Performance |
| Timeline |
| Pepco Group BV |
| Notoria |
Pepco Group and Notoria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pepco Group and Notoria
The main advantage of trading using opposite Pepco Group and Notoria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pepco Group position performs unexpectedly, Notoria 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 Notoria will offset losses from the drop in Notoria's long position.| Pepco Group vs. Bank Millennium SA | Pepco Group vs. PMPG Polskie Media | Pepco Group vs. Noble Financials SA | Pepco Group vs. Globe Trade Centre |
| Notoria vs. TEN SQUARE GAMES | Notoria vs. Gaming Factory SA | Notoria vs. UF Games SA | Notoria vs. Noble Financials 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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