Correlation Between Photocure and PCI Biotech
Can any of the company-specific risk be diversified away by investing in both Photocure and PCI Biotech 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 Photocure and PCI Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photocure and PCI Biotech Holding, you can compare the effects of market volatilities on Photocure and PCI Biotech 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 Photocure with a short position of PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photocure and PCI Biotech.
Diversification Opportunities for Photocure and PCI Biotech
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Photocure and PCI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Photocure and PCI Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI Biotech Holding and Photocure 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 Photocure are associated (or correlated) with PCI Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI Biotech Holding has no effect on the direction of Photocure i.e., Photocure and PCI Biotech go up and down completely randomly.
Pair Corralation between Photocure and PCI Biotech
Assuming the 90 days trading horizon Photocure is expected to generate 5.46 times less return on investment than PCI Biotech. But when comparing it to its historical volatility, Photocure is 2.44 times less risky than PCI Biotech. It trades about 0.01 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 196.00 in PCI Biotech Holding on September 4, 2024 and sell it today you would lose (56.00) from holding PCI Biotech Holding or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photocure vs. PCI Biotech Holding
Performance |
| Timeline |
| Photocure |
| PCI Biotech Holding |
Photocure and PCI Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photocure and PCI Biotech
The main advantage of trading using opposite Photocure and PCI Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photocure position performs unexpectedly, PCI Biotech 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 PCI Biotech will offset losses from the drop in PCI Biotech's long position.| Photocure vs. Proximar Seafood AS | Photocure vs. Eidesvik Offshore ASA | Photocure vs. Odfjell Drilling | Photocure vs. Sea1 Offshore |
| PCI Biotech vs. Nordic Mining ASA | PCI Biotech vs. BW Offshore | PCI Biotech vs. Nidaros Sparebank | PCI Biotech vs. Aasen Sparebank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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