Correlation Between PJT Partners and Northrim BanCorp

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

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

Diversification Opportunities for PJT Partners and Northrim BanCorp

0.93

Correlation Coefficient

PJT Partners  Northrim BanCorp

Almost no diversification

The 3 months correlation between PJT and Northrim is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and Northrim BanCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northrim BanCorp and PJT Partners 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 PJT Partners are associated (or correlated) with Northrim BanCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northrim BanCorp has no effect on the direction of PJT Partners i.e., PJT Partners and Northrim BanCorp go up and down completely randomly.

Pair Corralation between PJT Partners and Northrim BanCorp

Considering the 90-day investment horizon PJT Partners is expected to generate 1.0 times more return on investment than Northrim BanCorp. However, PJT Partners is 1.0 times more volatile than Northrim BanCorp. It trades about 0.01 of its potential returns per unit of risk. Northrim BanCorp is currently generating about -0.36 per unit of risk. 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	Very Strong
Accuracy	100.0%
Values	Daily Returns

PJT Partners  vs.  Northrim BanCorp

PJT Partners

Risk-Adjusted Performance

5 of 100

OK

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.

Northrim BanCorp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Northrim BanCorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Northrim BanCorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PJT Partners and Northrim BanCorp

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

The idea behind PJT Partners and Northrim BanCorp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.