Correlation Between Pitney Bowes and Addentax Group

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

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

Diversification Opportunities for Pitney Bowes and Addentax Group

-0.72

Correlation Coefficient

Pitney Bowes  Addentax Group

Pay attention - limited upside

The 3 months correlation between Pitney and Addentax is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes and Addentax Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addentax Group Corp and Pitney Bowes 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 Pitney Bowes are associated (or correlated) with Addentax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addentax Group Corp has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and Addentax Group go up and down completely randomly.

Pair Corralation between Pitney Bowes and Addentax Group

Considering the 90-day investment horizon Pitney Bowes is expected to generate 1.87 times less return on investment than Addentax Group. But when comparing it to its historical volatility, Pitney Bowes is 2.58 times less risky than Addentax Group. It trades about 0.07 of its potential returns per unit of risk. Addentax Group Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Addentax Group Corp on October 6, 2024 and sell it today you would earn a total of  7.00  from holding Addentax Group Corp or generate 9.59% return on investment over 90 days.

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

Pitney Bowes  vs.  Addentax Group Corp

Pitney Bowes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pitney Bowes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pitney Bowes may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Addentax Group Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addentax Group Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Addentax Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pitney Bowes and Addentax Group

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

The idea behind Pitney Bowes and Addentax Group Corp 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.

Check out your portfolio center.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.