Correlation Between Matrix and PCB Tec

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

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

Diversification Opportunities for Matrix and PCB Tec

0.28

Correlation Coefficient

Matrix  PCB Tec

Modest diversification

The 3 months correlation between Matrix and PCB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Matrix and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec and Matrix 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 Matrix are associated (or correlated) with PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Matrix i.e., Matrix and PCB Tec go up and down completely randomly.

Pair Corralation between Matrix and PCB Tec

Assuming the 90 days trading horizon Matrix is expected to under-perform the PCB Tec. But the stock apears to be less risky and, when comparing its historical volatility, Matrix is 1.3 times less risky than PCB Tec. The stock trades about -0.08 of its potential returns per unit of risk. The PCB Tec is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  113,200  in PCB Tec on July 3, 2025 and sell it today you would lose (5,800) from holding PCB Tec or give up 5.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Matrix  vs.  PCB Tec

Matrix

Risk-Adjusted Performance

Weakest

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

PCB Tec

Risk-Adjusted Performance

Weakest

Over the last 90 days PCB Tec has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PCB Tec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Matrix and PCB Tec

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

The idea behind Matrix and PCB Tec 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.