Correlation Between PF Industries and PFSweb

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

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

Diversification Opportunities for PF Industries and PFSweb

0.53

Correlation Coefficient

PF Industries  PFSweb

Very weak diversification

The 3 months correlation between PFIN and PFSweb is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PF Industries and PFSweb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFSweb Inc and PF Industries 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 PF Industries are associated (or correlated) with PFSweb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFSweb Inc has no effect on the direction of PF Industries i.e., PF Industries and PFSweb go up and down completely randomly.

Pair Corralation between PF Industries and PFSweb

If you would invest  452.00  in PFSweb Inc on October 3, 2024 and sell it today you would earn a total of  0.00  from holding PFSweb Inc or generate 0.0% return on investment over 90 days.

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

PF Industries  vs.  PFSweb Inc

PF Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PF Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, PF Industries is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

PFSweb Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PF Industries and PFSweb

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

The idea behind PF Industries and PFSweb Inc 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.