Correlation Between Piotech and BizConf Telecom

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

By analyzing existing cross correlation between Piotech Inc A and BizConf Telecom Co, you can compare the effects of market volatilities on Piotech and BizConf Telecom 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 Piotech with a short position of BizConf Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piotech and BizConf Telecom.

Diversification Opportunities for Piotech and BizConf Telecom

0.66

Correlation Coefficient

Piotech  BizConf Telecom

Poor diversification

The 3 months correlation between Piotech and BizConf is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Piotech Inc A and BizConf Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BizConf Telecom and Piotech 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 Piotech Inc A are associated (or correlated) with BizConf Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BizConf Telecom has no effect on the direction of Piotech i.e., Piotech and BizConf Telecom go up and down completely randomly.

Pair Corralation between Piotech and BizConf Telecom

Assuming the 90 days trading horizon Piotech Inc A is expected to generate 0.91 times more return on investment than BizConf Telecom. However, Piotech Inc A is 1.09 times less risky than BizConf Telecom. It trades about 0.05 of its potential returns per unit of risk. BizConf Telecom Co is currently generating about -0.03 per unit of risk. If you would invest  16,322  in Piotech Inc A on December 26, 2024 and sell it today you would earn a total of  1,043  from holding Piotech Inc A or generate 6.39% return on investment over 90 days.

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

Piotech Inc A  vs.  BizConf Telecom Co

Piotech Inc A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Piotech Inc A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Piotech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BizConf Telecom

Risk-Adjusted Performance

Very Weak

Over the last 90 days BizConf Telecom Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BizConf Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Piotech and BizConf Telecom

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

The idea behind Piotech Inc A and BizConf Telecom Co 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.