Correlation Between PTC INDUSTRIES and Welspun Investments

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

Diversification Opportunities for PTC INDUSTRIES and Welspun Investments

0.71

Correlation Coefficient

PTC INDUSTRIES  Welspun Investments

Poor diversification

The 3 months correlation between PTC and Welspun is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PTC INDUSTRIES LTD and Welspun Investments and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welspun Investments and 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 Welspun Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welspun Investments and has no effect on the direction of PTC INDUSTRIES i.e., PTC INDUSTRIES and Welspun Investments go up and down completely randomly.

Pair Corralation between PTC INDUSTRIES and Welspun Investments

Assuming the 90 days trading horizon PTC INDUSTRIES LTD is expected to generate 0.99 times more return on investment than Welspun Investments. However, PTC INDUSTRIES LTD is 1.01 times less risky than Welspun Investments. It trades about 0.11 of its potential returns per unit of risk. Welspun Investments and is currently generating about 0.01 per unit of risk. If you would invest  1,119,180  in PTC INDUSTRIES LTD on September 16, 2024 and sell it today you would earn a total of  35,880  from holding PTC INDUSTRIES LTD or generate 3.21% return on investment over 90 days.

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

PTC INDUSTRIES LTD  vs.  Welspun Investments and

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.

Welspun Investments and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Welspun Investments and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with PTC INDUSTRIES and Welspun Investments

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

The idea behind PTC INDUSTRIES LTD and Welspun Investments and 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.