Correlation Between PB Fintech and TPL Plastech

Can any of the company-specific risk be diversified away by investing in both PB Fintech and TPL Plastech 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 TPL Plastech 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 TPL Plastech Limited, you can compare the effects of market volatilities on PB Fintech and TPL Plastech 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 TPL Plastech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PB Fintech and TPL Plastech.

Diversification Opportunities for PB Fintech and TPL Plastech

0.91

Correlation Coefficient

PB Fintech  TPL Plastech

Almost no diversification

The 3 months correlation between POLICYBZR and TPL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PB Fintech Limited and TPL Plastech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPL Plastech Limited 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 TPL Plastech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPL Plastech Limited has no effect on the direction of PB Fintech i.e., PB Fintech and TPL Plastech go up and down completely randomly.

Pair Corralation between PB Fintech and TPL Plastech

Assuming the 90 days trading horizon PB Fintech Limited is expected to generate 1.14 times more return on investment than TPL Plastech. However, PB Fintech is 1.14 times more volatile than TPL Plastech Limited. It trades about -0.1 of its potential returns per unit of risk. TPL Plastech Limited is currently generating about -0.13 per unit of risk. If you would invest  210,785  in PB Fintech Limited on December 28, 2024 and sell it today you would lose (51,810) from holding PB Fintech Limited or give up 24.58% of portfolio value over 90 days.

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

PB Fintech Limited  vs.  TPL Plastech Limited

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.

TPL Plastech Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPL Plastech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PB Fintech and TPL Plastech

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

The idea behind PB Fintech Limited and TPL Plastech Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.