Correlation Between PACS Group, and Worthington Steel

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

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

Diversification Opportunities for PACS Group, and Worthington Steel

0.56

Correlation Coefficient

PACS Group,  Worthington Steel

Very weak diversification

The 3 months correlation between PACS and Worthington is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PACS Group, and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel and PACS 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 PACS Group, are associated (or correlated) with Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of PACS Group, i.e., PACS Group, and Worthington Steel go up and down completely randomly.

Pair Corralation between PACS Group, and Worthington Steel

Given the investment horizon of 90 days PACS Group, is expected to generate 0.82 times more return on investment than Worthington Steel. However, PACS Group, is 1.22 times less risky than Worthington Steel. It trades about -0.08 of its potential returns per unit of risk. Worthington Steel is currently generating about -0.07 per unit of risk. If you would invest  1,308  in PACS Group, on December 21, 2024 and sell it today you would lose (128.00) from holding PACS Group, or give up 9.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

PACS Group,  vs.  Worthington Steel

PACS Group,

Risk-Adjusted Performance

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 latest conflicting performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Worthington Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Worthington Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PACS Group, and Worthington Steel

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

The idea behind PACS Group, and Worthington Steel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.