Correlation Between PDG Realty and Lupatech

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

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

Diversification Opportunities for PDG Realty and Lupatech

0.0

Correlation Coefficient

PDG Realty  Lupatech

Pay attention - limited upside

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

Pair Corralation between PDG Realty and Lupatech

Assuming the 90 days trading horizon PDG Realty SA is expected to generate 15.41 times more return on investment than Lupatech. However, PDG Realty is 15.41 times more volatile than Lupatech SA. It trades about 0.01 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.08 per unit of risk. If you would invest  125.00  in PDG Realty SA on December 2, 2024 and sell it today you would lose (54.00) from holding PDG Realty SA or give up 43.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PDG Realty SA  vs.  Lupatech SA

PDG Realty SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days PDG Realty SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, PDG Realty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lupatech SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lupatech is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PDG Realty and Lupatech

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

The idea behind PDG Realty SA and Lupatech SA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.