Correlation Between Pcm Fund and James Small

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

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

Diversification Opportunities for Pcm Fund and James Small

0.46

Correlation Coefficient

Pcm Fund  James Small

Very weak diversification

The 3 months correlation between Pcm and James is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pcm Fund and James Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Small Cap and Pcm Fund 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 Pcm Fund are associated (or correlated) with James Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Small Cap has no effect on the direction of Pcm Fund i.e., Pcm Fund and James Small go up and down completely randomly.

Pair Corralation between Pcm Fund and James Small

Considering the 90-day investment horizon Pcm Fund is expected to generate 0.99 times more return on investment than James Small. However, Pcm Fund is 1.01 times less risky than James Small. It trades about 0.01 of its potential returns per unit of risk. James Small Cap is currently generating about -0.02 per unit of risk. If you would invest  611.00  in Pcm Fund on August 25, 2025 and sell it today you would earn a total of  3.00  from holding Pcm Fund or generate 0.49% return on investment over 90 days.

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

Pcm Fund  vs.  James Small Cap

Pcm Fund

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pcm Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy fundamental indicators, Pcm Fund is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

James Small Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days James Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, James Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pcm Fund and James Small

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

The idea behind Pcm Fund and James Small Cap 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.