Correlation Between XTRA Bitcoin and PJT Partners

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

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

Diversification Opportunities for XTRA Bitcoin and PJT Partners

0.17

Correlation Coefficient

XTRA Bitcoin  PJT Partners

Average diversification

The 3 months correlation between XTRA and PJT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding XTRA Bitcoin and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners and XTRA Bitcoin 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 XTRA Bitcoin are associated (or correlated) with PJT Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJT Partners has no effect on the direction of XTRA Bitcoin i.e., XTRA Bitcoin and PJT Partners go up and down completely randomly.

Pair Corralation between XTRA Bitcoin and PJT Partners

Given the investment horizon of 90 days XTRA Bitcoin is expected to under-perform the PJT Partners. In addition to that, XTRA Bitcoin is 4.84 times more volatile than PJT Partners. It trades about -0.14 of its total potential returns per unit of risk. PJT Partners is currently generating about 0.01 per unit of volatility. If you would invest  15,845  in PJT Partners on October 11, 2024 and sell it today you would lose (8.00) from holding PJT Partners or give up 0.05% of portfolio value over 90 days.

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

XTRA Bitcoin  vs.  PJT Partners

XTRA Bitcoin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XTRA Bitcoin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, XTRA Bitcoin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PJT Partners

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PJT Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking indicators, PJT Partners may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with XTRA Bitcoin and PJT Partners

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

The idea behind XTRA Bitcoin and PJT Partners 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.