Correlation Between PC Tel and BK Technologies

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

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

Diversification Opportunities for PC Tel and BK Technologies

0.0

Correlation Coefficient

PC Tel  BK Technologies

Pay attention - limited upside

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

Pair Corralation between PC Tel and BK Technologies

If you would invest (100.00) in PC Tel Inc on November 30, 2024 and sell it today you would earn a total of  100.00  from holding PC Tel Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PC Tel Inc  vs.  BK Technologies

PC Tel Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PC Tel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PC Tel is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

BK Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days BK Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with PC Tel and BK Technologies

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

The idea behind PC Tel Inc and BK Technologies 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.