Correlation Between AVALON TECHNOLOGIES and PB Fintech

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

By analyzing existing cross correlation between AVALON TECHNOLOGIES LTD and PB Fintech Limited, you can compare the effects of market volatilities on AVALON TECHNOLOGIES and PB Fintech 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 AVALON TECHNOLOGIES with a short position of PB Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVALON TECHNOLOGIES and PB Fintech.

Diversification Opportunities for AVALON TECHNOLOGIES and PB Fintech

0.77

Correlation Coefficient

AVALON TECHNOLOGIES  PB Fintech

Poor diversification

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

Pair Corralation between AVALON TECHNOLOGIES and PB Fintech

Assuming the 90 days trading horizon AVALON TECHNOLOGIES LTD is expected to under-perform the PB Fintech. In addition to that, AVALON TECHNOLOGIES is 1.14 times more volatile than PB Fintech Limited. It trades about -0.03 of its total potential returns per unit of risk. PB Fintech Limited is currently generating about 0.01 per unit of volatility. If you would invest  172,495  in PB Fintech Limited on October 22, 2024 and sell it today you would lose (55.00) from holding PB Fintech Limited or give up 0.03% of portfolio value over 90 days.

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

AVALON TECHNOLOGIES LTD  vs.  PB Fintech Limited

AVALON TECHNOLOGIES LTD

Risk-Adjusted Performance

14 of 100

Good

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

PB Fintech Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PB Fintech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, PB Fintech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AVALON TECHNOLOGIES and PB Fintech

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

The idea behind AVALON TECHNOLOGIES LTD and PB Fintech Limited 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.