Correlation Between True Games and PCC Rokita

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

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

Diversification Opportunities for True Games and PCC Rokita

0.48

Correlation Coefficient

True Games  PCC Rokita

Very weak diversification

The 3 months correlation between True and PCC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and PCC Rokita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCC Rokita SA and True Games 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 True Games Syndicate are associated (or correlated) with PCC Rokita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCC Rokita SA has no effect on the direction of True Games i.e., True Games and PCC Rokita go up and down completely randomly.

Pair Corralation between True Games and PCC Rokita

Assuming the 90 days trading horizon True Games Syndicate is expected to generate 3.01 times more return on investment than PCC Rokita. However, True Games is 3.01 times more volatile than PCC Rokita SA. It trades about 0.13 of its potential returns per unit of risk. PCC Rokita SA is currently generating about 0.12 per unit of risk. If you would invest  44.00  in True Games Syndicate on December 26, 2024 and sell it today you would earn a total of  10.00  from holding True Games Syndicate or generate 22.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.0%
Values	Daily Returns

True Games Syndicate  vs.  PCC Rokita SA

True Games Syndicate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in True Games Syndicate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, True Games reported solid returns over the last few months and may actually be approaching a breakup point.

PCC Rokita SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PCC Rokita SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, PCC Rokita may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with True Games and PCC Rokita

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

The idea behind True Games Syndicate and PCC Rokita 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.