Correlation Between PBTS Old and Exela Technologies

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

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

Diversification Opportunities for PBTS Old and Exela Technologies

0.57

Correlation Coefficient

PBTS Old  Exela Technologies

Very weak diversification

The 3 months correlation between PBTS and Exela is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PBTS Old and Exela Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies and PBTS Old 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 PBTS Old are associated (or correlated) with Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of PBTS Old i.e., PBTS Old and Exela Technologies go up and down completely randomly.

Pair Corralation between PBTS Old and Exela Technologies

If you would invest  30.00  in PBTS Old on October 7, 2024 and sell it today you would earn a total of  0.00  from holding PBTS Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.47%
Values	Daily Returns

PBTS Old  vs.  Exela Technologies

PBTS Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBTS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PBTS Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PBTS Old and Exela Technologies

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

The idea behind PBTS Old and Exela Technologies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.