Correlation Between Pf Bakkafrost and PCI Biotech

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

By analyzing existing cross correlation between Pf Bakkafrost and PCI Biotech Holding, you can compare the effects of market volatilities on Pf Bakkafrost and PCI Biotech 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 Pf Bakkafrost with a short position of PCI Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pf Bakkafrost and PCI Biotech.

Diversification Opportunities for Pf Bakkafrost and PCI Biotech

-0.52

Correlation Coefficient

Pf Bakkafrost  PCI Biotech

Excellent diversification

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

Pair Corralation between Pf Bakkafrost and PCI Biotech

Assuming the 90 days trading horizon Pf Bakkafrost is expected to generate 4.17 times less return on investment than PCI Biotech. But when comparing it to its historical volatility, Pf Bakkafrost is 4.22 times less risky than PCI Biotech. It trades about 0.03 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  220.00  in PCI Biotech Holding on September 14, 2024 and sell it today you would lose (68.00) from holding PCI Biotech Holding or give up 30.91% of portfolio value over 90 days.

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

Pf Bakkafrost  vs.  PCI Biotech Holding

Pf Bakkafrost

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pf Bakkafrost are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Pf Bakkafrost displayed solid returns over the last few months and may actually be approaching a breakup point.

PCI Biotech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCI Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, PCI Biotech is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pf Bakkafrost and PCI Biotech

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

The idea behind Pf Bakkafrost and PCI Biotech Holding 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.