Correlation Between Com7 PCL and More Return

Can any of the company-specific risk be diversified away by investing in both Com7 PCL and More Return 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 Com7 PCL and More Return into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Com7 PCL and More Return Public, you can compare the effects of market volatilities on Com7 PCL and More Return 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 Com7 PCL with a short position of More Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and More Return.

Diversification Opportunities for Com7 PCL and More Return

0.48

Correlation Coefficient

Com7 PCL  More Return

Very weak diversification

The 3 months correlation between Com7 and More is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and More Return Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on More Return Public and Com7 PCL 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 Com7 PCL are associated (or correlated) with More Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of More Return Public has no effect on the direction of Com7 PCL i.e., Com7 PCL and More Return go up and down completely randomly.

Pair Corralation between Com7 PCL and More Return

Assuming the 90 days trading horizon Com7 PCL is expected to under-perform the More Return. But the stock apears to be less risky and, when comparing its historical volatility, Com7 PCL is 20.11 times less risky than More Return. The stock trades about -0.01 of its potential returns per unit of risk. The More Return Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  41.00  in More Return Public on October 20, 2024 and sell it today you would lose (39.00) from holding More Return Public or give up 95.12% of portfolio value over 90 days.

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

Com7 PCL  vs.  More Return Public

Com7 PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Com7 PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

More Return Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days More Return Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, More Return is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Com7 PCL and More Return

The main advantage of trading using opposite Com7 PCL and More Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, More Return 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 More Return will offset losses from the drop in More Return's long position.

The idea behind Com7 PCL and More Return Public 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.