Correlation Between PB Fintech and Styrenix Performance

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

By analyzing existing cross correlation between PB Fintech Limited and Styrenix Performance Materials, you can compare the effects of market volatilities on PB Fintech and Styrenix Performance 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 PB Fintech with a short position of Styrenix Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PB Fintech and Styrenix Performance.

Diversification Opportunities for PB Fintech and Styrenix Performance

0.72

Correlation Coefficient

PB Fintech  Styrenix Performance

Poor diversification

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

Pair Corralation between PB Fintech and Styrenix Performance

Assuming the 90 days trading horizon PB Fintech Limited is expected to under-perform the Styrenix Performance. In addition to that, PB Fintech is 1.62 times more volatile than Styrenix Performance Materials. It trades about -0.09 of its total potential returns per unit of risk. Styrenix Performance Materials is currently generating about -0.04 per unit of volatility. If you would invest  292,310  in Styrenix Performance Materials on December 28, 2024 and sell it today you would lose (22,210) from holding Styrenix Performance Materials or give up 7.6% of portfolio value over 90 days.

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

PB Fintech Limited  vs.  Styrenix Performance Materials

PB Fintech Limited

Risk-Adjusted Performance

Very Weak

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

Styrenix Performance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Styrenix Performance Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with PB Fintech and Styrenix Performance

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

The idea behind PB Fintech Limited and Styrenix Performance Materials 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.