Correlation Between PTC and CoreCard Corp

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

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

Diversification Opportunities for PTC and CoreCard Corp

0.84

Correlation Coefficient

PTC  CoreCard Corp

Very poor diversification

The 3 months correlation between PTC and CoreCard is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PTC Inc and CoreCard Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCard Corp and PTC 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 PTC Inc are associated (or correlated) with CoreCard Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCard Corp has no effect on the direction of PTC i.e., PTC and CoreCard Corp go up and down completely randomly.

Pair Corralation between PTC and CoreCard Corp

Considering the 90-day investment horizon PTC Inc is expected to under-perform the CoreCard Corp. But the stock apears to be less risky and, when comparing its historical volatility, PTC Inc is 1.94 times less risky than CoreCard Corp. The stock trades about 0.0 of its potential returns per unit of risk. The CoreCard Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,789  in CoreCard Corp on September 20, 2024 and sell it today you would earn a total of  379.00  from holding CoreCard Corp or generate 21.19% return on investment over 90 days.

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

PTC Inc  vs.  CoreCard Corp

PTC Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, PTC may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CoreCard Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCard Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, CoreCard Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTC and CoreCard Corp

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

The idea behind PTC Inc and CoreCard Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.