Correlation Between Lery Seafood and PCI Biotech

Can any of the company-specific risk be diversified away by investing in both Lery Seafood 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 Lery Seafood and PCI Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lery Seafood Group and PCI Biotech Holding, you can compare the effects of market volatilities on Lery Seafood 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 Lery Seafood with a short position of PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and PCI Biotech.

Diversification Opportunities for Lery Seafood and PCI Biotech

-0.3

Correlation Coefficient

Lery Seafood  PCI Biotech

Very good diversification

The 3 months correlation between Lery and PCI is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group 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 Lery Seafood 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 Lery Seafood Group 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 Lery Seafood i.e., Lery Seafood and PCI Biotech go up and down completely randomly.

Pair Corralation between Lery Seafood and PCI Biotech

Assuming the 90 days trading horizon Lery Seafood is expected to generate 11.15 times less return on investment than PCI Biotech. But when comparing it to its historical volatility, Lery Seafood Group is 7.04 times less risky than PCI Biotech. It trades about 0.02 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  152.00  in PCI Biotech Holding on September 5, 2024 and sell it today you would lose (3.00) from holding PCI Biotech Holding or give up 1.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lery Seafood Group  vs.  PCI Biotech Holding

Lery Seafood Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PCI Biotech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCI Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Lery Seafood and PCI Biotech

The main advantage of trading using opposite Lery Seafood and PCI Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood 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.

The idea behind Lery Seafood Group and PCI Biotech Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.