Correlation Between TARGET and PACIFIC

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

By analyzing existing cross correlation between TARGET P 7 and PACIFIC GAS AND, you can compare the effects of market volatilities on TARGET 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 TARGET with a short position of PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of TARGET and PACIFIC.

Diversification Opportunities for TARGET and PACIFIC

0.0

Correlation Coefficient

TARGET  PACIFIC

Pay attention - limited upside

The 3 months correlation between TARGET and PACIFIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TARGET P 7 and PACIFIC GAS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS AND and TARGET 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 TARGET P 7 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 AND has no effect on the direction of TARGET i.e., TARGET and PACIFIC go up and down completely randomly.

Pair Corralation between TARGET and PACIFIC

If you would invest  11,306  in TARGET P 7 on October 24, 2024 and sell it today you would earn a total of  1,038  from holding TARGET P 7 or generate 9.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.85%
Values	Daily Returns

TARGET P 7  vs.  PACIFIC GAS AND

TARGET P 7

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TARGET P 7 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, TARGET sustained solid returns over the last few months and may actually be approaching a breakup point.

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 somewhat strong basic indicators, PACIFIC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TARGET and PACIFIC

The main advantage of trading using opposite TARGET and PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TARGET 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 TARGET P 7 and PACIFIC GAS AND 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.