Relative performance and correlation
I was just re-reading u/6JDanish 's post here, where they highlighted that PCT's daily price movements have been mostly correlated to the Russell 2000. My interpretation is that this implies that the direction of day-to-day moves are being driven primarily by index fund flows that track the Russell.
Here's a different way to look at it. StockCharts lets you do relative performance charts, where it divides the price of one ticker vs the other. Here are 6 month charts of PCT's stock price and then the relative performance to IWM:
The decline from December to April showed PCT underperforming the Russell. There were more sellers (or fewer buyers) besides just index fund flows.
The ramp starting in May is PCT outperforming the Russell, where there are more buyers than just the index fund flows.
Here's IWM's chart for reference:
Anyone have any other observations or interpretations?
Posted Jun 3, 2025, 2:40 PM UTC