Correlation Between Coinbase Global and PC Connection

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Can any of the company-specific risk be diversified away by investing in both Coinbase Global and PC Connection 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 Coinbase Global and PC Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coinbase Global and PC Connection, you can compare the effects of market volatilities on Coinbase Global and PC Connection 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 Coinbase Global with a short position of PC Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coinbase Global and PC Connection.

Diversification Opportunities for Coinbase Global and PC Connection

-0.53
  Correlation Coefficient

Excellent diversification

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

Pair Corralation between Coinbase Global and PC Connection

Given the investment horizon of 90 days Coinbase Global is expected to under-perform the PC Connection. In addition to that, Coinbase Global is 2.96 times more volatile than PC Connection. It trades about -0.04 of its total potential returns per unit of risk. PC Connection is currently generating about 0.02 per unit of volatility. If you would invest  5,055  in PC Connection on August 30, 2022 and sell it today you would earn a total of  333.00  from holding PC Connection or generate 6.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy86.82%
ValuesDaily Returns

Coinbase Global Inc  vs.  PC Connection

 Performance (%) 
       Timeline  
Coinbase Global 
Coinbase Performance
0 of 100
Over the last 90 days Coinbase Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Coinbase Price Channel

PC Connection 
PC Connection Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in PC Connection are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PC Connection may actually be approaching a critical reversion point that can send shares even higher in December 2022.

PC Connection Price Channel

Coinbase Global and PC Connection Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Coinbase Global and PC Connection

The main advantage of trading using opposite Coinbase Global and PC Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coinbase Global position performs unexpectedly, PC Connection 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 PC Connection will offset losses from the drop in PC Connection's long position.
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The idea behind Coinbase Global and PC Connection 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

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