Correlation Between Postal Realty and PACIFIC

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

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

Diversification Opportunities for Postal Realty and PACIFIC

-0.31

Correlation Coefficient

Postal Realty  PACIFIC

Very good diversification

The 3 months correlation between Postal and PACIFIC is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC and Postal 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 Postal Realty Trust are associated (or correlated) with PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of Postal Realty i.e., Postal Realty and PACIFIC go up and down completely randomly.

Pair Corralation between Postal Realty and PACIFIC

Given the investment horizon of 90 days Postal Realty Trust is expected to under-perform the PACIFIC. In addition to that, Postal Realty is 3.77 times more volatile than PACIFIC GAS ELECTRIC. It trades about -0.01 of its total potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about 0.04 per unit of volatility. If you would invest  9,613  in PACIFIC GAS ELECTRIC on October 22, 2024 and sell it today you would earn a total of  217.00  from holding PACIFIC GAS ELECTRIC or generate 2.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Postal Realty Trust  vs.  PACIFIC GAS ELECTRIC

Postal Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Postal Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

PACIFIC GAS ELECTRIC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PACIFIC GAS ELECTRIC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PACIFIC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Postal Realty and PACIFIC

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

The idea behind Postal Realty Trust and PACIFIC GAS ELECTRIC 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.