Correlation Between Embecta Corp and PACS Group,

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

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

Diversification Opportunities for Embecta Corp and PACS Group,

-0.76

Correlation Coefficient

Embecta Corp  PACS Group,

Pay attention - limited upside

The 3 months correlation between Embecta and PACS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and PACS Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACS Group, and Embecta Corp 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 Embecta Corp are associated (or correlated) with PACS Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACS Group, has no effect on the direction of Embecta Corp i.e., Embecta Corp and PACS Group, go up and down completely randomly.

Pair Corralation between Embecta Corp and PACS Group,

Given the investment horizon of 90 days Embecta Corp is expected to under-perform the PACS Group,. In addition to that, Embecta Corp is 1.31 times more volatile than PACS Group,. It trades about -0.19 of its total potential returns per unit of risk. PACS Group, is currently generating about 0.18 per unit of volatility. If you would invest  1,308  in PACS Group, on October 22, 2024 and sell it today you would earn a total of  74.00  from holding PACS Group, or generate 5.66% return on investment over 90 days.

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

Embecta Corp  vs.  PACS Group,

Embecta Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Embecta Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Embecta Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

PACS Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACS Group, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Embecta Corp and PACS Group,

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

The idea behind Embecta Corp and PACS Group, 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.