Correlation Between PC Tel and Actelis Networks

Can any of the company-specific risk be diversified away by investing in both PC Tel and Actelis Networks 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 PC Tel and Actelis Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PC Tel Inc and Actelis Networks, you can compare the effects of market volatilities on PC Tel and Actelis Networks 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 PC Tel with a short position of Actelis Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of PC Tel and Actelis Networks.

Diversification Opportunities for PC Tel and Actelis Networks

-0.52

Correlation Coefficient

PC Tel  Actelis Networks

Excellent diversification

The 3 months correlation between PCTI and Actelis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PC Tel Inc and Actelis Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actelis Networks and PC Tel 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 PC Tel Inc are associated (or correlated) with Actelis Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actelis Networks has no effect on the direction of PC Tel i.e., PC Tel and Actelis Networks go up and down completely randomly.

Pair Corralation between PC Tel and Actelis Networks

Given the investment horizon of 90 days PC Tel is expected to generate 7.11 times less return on investment than Actelis Networks. But when comparing it to its historical volatility, PC Tel Inc is 14.17 times less risky than Actelis Networks. It trades about 0.07 of its potential returns per unit of risk. Actelis Networks is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  472.00  in Actelis Networks on September 21, 2024 and sell it today you would lose (370.00) from holding Actelis Networks or give up 78.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	28.28%
Values	Daily Returns

PC Tel Inc  vs.  Actelis Networks

PC Tel Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PC Tel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PC Tel is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Actelis Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Actelis Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PC Tel and Actelis Networks

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

The idea behind PC Tel Inc and Actelis Networks 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.