Correlation Between Converge Information and Pacificonline Systems

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

By analyzing existing cross correlation between Converge Information Communications and Pacificonline Systems, you can compare the effects of market volatilities on Converge Information and Pacificonline Systems 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 Converge Information with a short position of Pacificonline Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Pacificonline Systems.

Diversification Opportunities for Converge Information and Pacificonline Systems

0.74

Correlation Coefficient

Converge Information  Pacificonline Systems

Poor diversification

The 3 months correlation between Converge and Pacificonline is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Pacificonline Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacificonline Systems and Converge Information 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 Converge Information Communications are associated (or correlated) with Pacificonline Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacificonline Systems has no effect on the direction of Converge Information i.e., Converge Information and Pacificonline Systems go up and down completely randomly.

Pair Corralation between Converge Information and Pacificonline Systems

Assuming the 90 days trading horizon Converge Information Communications is expected to under-perform the Pacificonline Systems. But the stock apears to be less risky and, when comparing its historical volatility, Converge Information Communications is 1.49 times less risky than Pacificonline Systems. The stock trades about -0.08 of its potential returns per unit of risk. The Pacificonline Systems is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  340.00  in Pacificonline Systems on May 6, 2025 and sell it today you would lose (32.00) from holding Pacificonline Systems or give up 9.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.16%
Values	Daily Returns

Converge Information Communica  vs.  Pacificonline Systems

Converge Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Converge Information Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pacificonline Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacificonline Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Converge Information and Pacificonline Systems

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

The idea behind Converge Information Communications and Pacificonline Systems 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.