Correlation Between Mader Group and PFSweb

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

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

Diversification Opportunities for Mader Group and PFSweb

0.09

Correlation Coefficient

Mader Group  PFSweb

Significant diversification

The 3 months correlation between Mader and PFSweb is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited and PFSweb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFSweb Inc and Mader Group 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 Mader Group Limited are associated (or correlated) with PFSweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFSweb Inc has no effect on the direction of Mader Group i.e., Mader Group and PFSweb go up and down completely randomly.

Pair Corralation between Mader Group and PFSweb

If you would invest  452.00  in PFSweb Inc on September 2, 2024 and sell it today you would earn a total of  0.00  from holding PFSweb Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Mader Group Limited  vs.  PFSweb Inc

Mader Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mader Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

PFSweb Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Mader Group and PFSweb

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

The idea behind Mader Group Limited and PFSweb Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.