Correlation Between PCI Biotech and Xplora Technologies

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

By analyzing existing cross correlation between PCI Biotech Holding and Xplora Technologies As, you can compare the effects of market volatilities on PCI Biotech and Xplora Technologies 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 PCI Biotech with a short position of Xplora Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCI Biotech and Xplora Technologies.

Diversification Opportunities for PCI Biotech and Xplora Technologies

-0.71

Correlation Coefficient

PCI Biotech  Xplora Technologies

Pay attention - limited upside

The 3 months correlation between PCI and Xplora is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PCI Biotech Holding and Xplora Technologies As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xplora Technologies and PCI Biotech 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 PCI Biotech Holding are associated (or correlated) with Xplora Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xplora Technologies has no effect on the direction of PCI Biotech i.e., PCI Biotech and Xplora Technologies go up and down completely randomly.

Pair Corralation between PCI Biotech and Xplora Technologies

Assuming the 90 days trading horizon PCI Biotech Holding is expected to under-perform the Xplora Technologies. In addition to that, PCI Biotech is 2.29 times more volatile than Xplora Technologies As. It trades about 0.0 of its total potential returns per unit of risk. Xplora Technologies As is currently generating about 0.32 per unit of volatility. If you would invest  1,770  in Xplora Technologies As on September 14, 2024 and sell it today you would earn a total of  1,470  from holding Xplora Technologies As or generate 83.05% return on investment over 90 days.

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

PCI Biotech Holding  vs.  Xplora Technologies As

PCI Biotech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCI Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, PCI Biotech is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Xplora Technologies

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xplora Technologies As are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Xplora Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PCI Biotech and Xplora Technologies

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

The idea behind PCI Biotech Holding and Xplora Technologies As 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 Transaction History module to view history of all your transactions and understand their impact on performance.