Correlation Between Punjab Sind and ZF Commercial

Can any of the company-specific risk be diversified away by investing in both Punjab Sind and ZF Commercial 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 Punjab Sind and ZF Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Punjab Sind Bank and ZF Commercial Vehicle, you can compare the effects of market volatilities on Punjab Sind and ZF Commercial 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 Punjab Sind with a short position of ZF Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Punjab Sind and ZF Commercial.

Diversification Opportunities for Punjab Sind and ZF Commercial

0.6

Correlation Coefficient

Punjab Sind  ZF Commercial

Poor diversification

The 3 months correlation between Punjab and ZFCVINDIA is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Punjab Sind Bank and ZF Commercial Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZF Commercial Vehicle and Punjab Sind 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 Punjab Sind Bank are associated (or correlated) with ZF Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZF Commercial Vehicle has no effect on the direction of Punjab Sind i.e., Punjab Sind and ZF Commercial go up and down completely randomly.

Pair Corralation between Punjab Sind and ZF Commercial

Assuming the 90 days trading horizon Punjab Sind Bank is expected to under-perform the ZF Commercial. But the stock apears to be less risky and, when comparing its historical volatility, Punjab Sind Bank is 1.47 times less risky than ZF Commercial. The stock trades about -0.36 of its potential returns per unit of risk. The ZF Commercial Vehicle is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,103,400  in ZF Commercial Vehicle on December 2, 2024 and sell it today you would lose (9,210) from holding ZF Commercial Vehicle or give up 0.83% of portfolio value over 90 days.

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

Punjab Sind Bank  vs.  ZF Commercial Vehicle

Punjab Sind Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Punjab Sind Bank 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ZF Commercial Vehicle

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZF Commercial Vehicle has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Punjab Sind and ZF Commercial

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

The idea behind Punjab Sind Bank and ZF Commercial Vehicle 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.