Correlation Between PTC INDUSTRIES and Bigbloc Construction

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

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

Diversification Opportunities for PTC INDUSTRIES and Bigbloc Construction

0.49

Correlation Coefficient

PTC INDUSTRIES  Bigbloc Construction

Very weak diversification

The 3 months correlation between PTC and Bigbloc is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PTC INDUSTRIES LTD and Bigbloc Construction Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bigbloc Construction and PTC INDUSTRIES 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 INDUSTRIES LTD are associated (or correlated) with Bigbloc Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bigbloc Construction has no effect on the direction of PTC INDUSTRIES i.e., PTC INDUSTRIES and Bigbloc Construction go up and down completely randomly.

Pair Corralation between PTC INDUSTRIES and Bigbloc Construction

Assuming the 90 days trading horizon PTC INDUSTRIES LTD is expected to under-perform the Bigbloc Construction. But the stock apears to be less risky and, when comparing its historical volatility, PTC INDUSTRIES LTD is 1.82 times less risky than Bigbloc Construction. The stock trades about -0.18 of its potential returns per unit of risk. The Bigbloc Construction Limited is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  13,398  in Bigbloc Construction Limited on September 16, 2024 and sell it today you would lose (2,346) from holding Bigbloc Construction Limited or give up 17.51% of portfolio value over 90 days.

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

PTC INDUSTRIES LTD  vs.  Bigbloc Construction Limited

PTC INDUSTRIES LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTC INDUSTRIES LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bigbloc Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bigbloc Construction 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 essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PTC INDUSTRIES and Bigbloc Construction

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

The idea behind PTC INDUSTRIES LTD and Bigbloc Construction 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.