Correlation Between PACIFIC and BRC

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

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

Diversification Opportunities for PACIFIC and BRC

0.23

Correlation Coefficient

PACIFIC  BRC

Modest diversification

The 3 months correlation between PACIFIC and BRC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC GAS AND and BRC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRC Inc and PACIFIC 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 PACIFIC GAS AND are associated (or correlated) with BRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRC Inc has no effect on the direction of PACIFIC i.e., PACIFIC and BRC go up and down completely randomly.

Pair Corralation between PACIFIC and BRC

Assuming the 90 days trading horizon PACIFIC GAS AND is expected to under-perform the BRC. But the bond apears to be less risky and, when comparing its historical volatility, PACIFIC GAS AND is 2.56 times less risky than BRC. The bond trades about -0.17 of its potential returns per unit of risk. The BRC Inc is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  326.00  in BRC Inc on October 23, 2024 and sell it today you would lose (28.00) from holding BRC Inc or give up 8.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

PACIFIC GAS AND  vs.  BRC Inc

PACIFIC GAS AND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACIFIC GAS AND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PACIFIC GAS AND investors.

BRC Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with PACIFIC and BRC

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

The idea behind PACIFIC GAS AND and BRC 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 Stocks Directory module to find actively traded stocks across global markets.