Correlation Between Associated British and Pensionbee Group

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

By analyzing existing cross correlation between Associated British Foods and Pensionbee Group PLC, you can compare the effects of market volatilities on Associated British and Pensionbee Group 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 Associated British with a short position of Pensionbee Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Pensionbee Group.

Diversification Opportunities for Associated British and Pensionbee Group

0.0

Correlation Coefficient

Associated British  Pensionbee Group

Pay attention - limited upside

The 3 months correlation between Associated and Pensionbee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and Pensionbee Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pensionbee Group PLC and Associated British 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 Associated British Foods are associated (or correlated) with Pensionbee Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pensionbee Group PLC has no effect on the direction of Associated British i.e., Associated British and Pensionbee Group go up and down completely randomly.

Pair Corralation between Associated British and Pensionbee Group

If you would invest  0.00  in Pensionbee Group PLC on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Pensionbee Group PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Associated British Foods  vs.  Pensionbee Group PLC

Associated British Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associated British Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pensionbee Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pensionbee Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pensionbee Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Associated British and Pensionbee Group

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

The idea behind Associated British Foods and Pensionbee Group PLC 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.