Correlation Between PCB Tec and Beeio Honey

Can any of the company-specific risk be diversified away by investing in both PCB Tec and Beeio Honey 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 PCB Tec and Beeio Honey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCB Tec and Beeio Honey, you can compare the effects of market volatilities on PCB Tec and Beeio Honey 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 PCB Tec with a short position of Beeio Honey. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCB Tec and Beeio Honey.

Diversification Opportunities for PCB Tec and Beeio Honey

-0.77

Correlation Coefficient

PCB Tec  Beeio Honey

Pay attention - limited upside

The 3 months correlation between PCB and Beeio is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PCB Tec and Beeio Honey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeio Honey and PCB Tec 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 PCB Tec are associated (or correlated) with Beeio Honey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeio Honey has no effect on the direction of PCB Tec i.e., PCB Tec and Beeio Honey go up and down completely randomly.

Pair Corralation between PCB Tec and Beeio Honey

Assuming the 90 days trading horizon PCB Tec is expected to generate 0.51 times more return on investment than Beeio Honey. However, PCB Tec is 1.97 times less risky than Beeio Honey. It trades about 0.24 of its potential returns per unit of risk. Beeio Honey is currently generating about -0.03 per unit of risk. If you would invest  36,540  in PCB Tec on September 29, 2024 and sell it today you would earn a total of  40,490  from holding PCB Tec or generate 110.81% return on investment over 90 days.

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

PCB Tec  vs.  Beeio Honey

PCB Tec

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PCB Tec are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PCB Tec sustained solid returns over the last few months and may actually be approaching a breakup point.

Beeio Honey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beeio Honey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PCB Tec and Beeio Honey

The main advantage of trading using opposite PCB Tec and Beeio Honey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCB Tec position performs unexpectedly, Beeio Honey 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 Beeio Honey will offset losses from the drop in Beeio Honey's long position.

The idea behind PCB Tec and Beeio Honey 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.

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.