Correlation Between Pepco Group and CCC SA

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

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

Diversification Opportunities for Pepco Group and CCC SA

-0.65

Correlation Coefficient

Pepco Group  CCC SA

Excellent diversification

The 3 months correlation between Pepco and CCC is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pepco Group BV and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC SA and Pepco Group 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 Pepco Group BV are associated (or correlated) with CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of Pepco Group i.e., Pepco Group and CCC SA go up and down completely randomly.

Pair Corralation between Pepco Group and CCC SA

Assuming the 90 days trading horizon Pepco Group BV is expected to generate 0.79 times more return on investment than CCC SA. However, Pepco Group BV is 1.26 times less risky than CCC SA. It trades about 0.19 of its potential returns per unit of risk. CCC SA is currently generating about -0.05 per unit of risk. If you would invest  1,750  in Pepco Group BV on April 23, 2025 and sell it today you would earn a total of  510.00  from holding Pepco Group BV or generate 29.14% return on investment over 90 days.

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

Pepco Group BV  vs.  CCC SA

Pepco Group BV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pepco Group BV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Pepco Group reported solid returns over the last few months and may actually be approaching a breakup point.

CCC SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak 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.

Pair Trading with Pepco Group and CCC SA

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

The idea behind Pepco Group BV and CCC SA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.