Correlation Between TPL Plastech and PB Fintech

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

By analyzing existing cross correlation between TPL Plastech Limited and PB Fintech Limited, you can compare the effects of market volatilities on TPL Plastech and PB Fintech 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 TPL Plastech with a short position of PB Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPL Plastech and PB Fintech.

Diversification Opportunities for TPL Plastech and PB Fintech

0.91

Correlation Coefficient

TPL Plastech  PB Fintech

Almost no diversification

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

Pair Corralation between TPL Plastech and PB Fintech

Assuming the 90 days trading horizon TPL Plastech Limited is expected to under-perform the PB Fintech. But the stock apears to be less risky and, when comparing its historical volatility, TPL Plastech Limited is 1.14 times less risky than PB Fintech. The stock trades about -0.13 of its potential returns per unit of risk. The PB Fintech Limited is currently generating about -0.1 of returns per unit of risk over similar time horizon. 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

TPL Plastech Limited  vs.  PB Fintech Limited

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.

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.

Pair Trading with TPL Plastech and PB Fintech

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

The idea behind TPL Plastech Limited and PB Fintech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.