Correlation Between Group 6 and Pioneer Credit

Can any of the company-specific risk be diversified away by investing in both Group 6 and Pioneer Credit 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 Group 6 and Pioneer Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Group 6 Metals and Pioneer Credit, you can compare the effects of market volatilities on Group 6 and Pioneer Credit 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 Group 6 with a short position of Pioneer Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Pioneer Credit.

Diversification Opportunities for Group 6 and Pioneer Credit

0.0

Correlation Coefficient

Group 6  Pioneer Credit

Pay attention - limited upside

The 3 months correlation between Group and Pioneer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Pioneer Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Credit and Group 6 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 Group 6 Metals are associated (or correlated) with Pioneer Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Credit has no effect on the direction of Group 6 i.e., Group 6 and Pioneer Credit go up and down completely randomly.

Pair Corralation between Group 6 and Pioneer Credit

Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Pioneer Credit. In addition to that, Group 6 is 1.78 times more volatile than Pioneer Credit. It trades about -0.04 of its total potential returns per unit of risk. Pioneer Credit is currently generating about 0.06 per unit of volatility. If you would invest  35.00  in Pioneer Credit on October 5, 2024 and sell it today you would earn a total of  21.00  from holding Pioneer Credit or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Group 6 Metals  vs.  Pioneer Credit

Group 6 Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Group 6 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Group 6 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pioneer Credit

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Credit are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Pioneer Credit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Group 6 and Pioneer Credit

The main advantage of trading using opposite Group 6 and Pioneer Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Pioneer Credit 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 Pioneer Credit will offset losses from the drop in Pioneer Credit's long position.

The idea behind Group 6 Metals and Pioneer Credit 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.