Correlation Between EX PACK and Pegasus Hotels

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

By analyzing existing cross correlation between EX PACK RUGATED CARTONS and Pegasus Hotels of, you can compare the effects of market volatilities on EX PACK and Pegasus Hotels 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 EX PACK with a short position of Pegasus Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of EX PACK and Pegasus Hotels.

Diversification Opportunities for EX PACK and Pegasus Hotels

0.6

Correlation Coefficient

EX PACK  Pegasus Hotels

Poor diversification

The 3 months correlation between PACKN0000 and Pegasus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding EX PACK RUGATED CARTONS and Pegasus Hotels of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Hotels and EX PACK 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 EX PACK RUGATED CARTONS are associated (or correlated) with Pegasus Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Hotels has no effect on the direction of EX PACK i.e., EX PACK and Pegasus Hotels go up and down completely randomly.

Pair Corralation between EX PACK and Pegasus Hotels

Assuming the 90 days trading horizon EX PACK RUGATED CARTONS is expected to under-perform the Pegasus Hotels. But the stock apears to be less risky and, when comparing its historical volatility, EX PACK RUGATED CARTONS is 1.98 times less risky than Pegasus Hotels. The stock trades about -0.23 of its potential returns per unit of risk. The Pegasus Hotels of is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  3,800  in Pegasus Hotels of on December 28, 2024 and sell it today you would lose (500.00) from holding Pegasus Hotels of or give up 13.16% of portfolio value over 90 days.

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

EX PACK RUGATED CARTONS  vs.  Pegasus Hotels of

EX PACK RUGATED

Risk-Adjusted Performance

Very Weak

Over the last 90 days EX PACK RUGATED CARTONS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pegasus Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pegasus Hotels of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with EX PACK and Pegasus Hotels

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

The idea behind EX PACK RUGATED CARTONS and Pegasus Hotels of 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.