Correlation Between Manhattan Associates and PTC

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

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

Diversification Opportunities for Manhattan Associates and PTC

0.4

Correlation Coefficient

Manhattan Associates  PTC

Very weak diversification

The 3 months correlation between Manhattan and PTC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and PTC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Inc and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with PTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Inc has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and PTC go up and down completely randomly.

Pair Corralation between Manhattan Associates and PTC

Given the investment horizon of 90 days Manhattan Associates is expected to generate 1.4 times more return on investment than PTC. However, Manhattan Associates is 1.4 times more volatile than PTC Inc. It trades about 0.08 of its potential returns per unit of risk. PTC Inc is currently generating about 0.06 per unit of risk. If you would invest  14,577  in Manhattan Associates on October 3, 2024 and sell it today you would earn a total of  12,447  from holding Manhattan Associates or generate 85.39% return on investment over 90 days.

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

Manhattan Associates  vs.  PTC Inc

Manhattan Associates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manhattan Associates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Manhattan Associates is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

PTC Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PTC is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Manhattan Associates and PTC

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

The idea behind Manhattan Associates and PTC Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.