Correlation Between Vacasa and PTC

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

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

Diversification Opportunities for Vacasa and PTC

-0.48

Correlation Coefficient

Vacasa  PTC

Very good diversification

The 3 months correlation between Vacasa and PTC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vacasa Inc and PTC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Inc and Vacasa 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 Vacasa Inc are associated (or correlated) with PTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Inc has no effect on the direction of Vacasa i.e., Vacasa and PTC go up and down completely randomly.

Pair Corralation between Vacasa and PTC

Given the investment horizon of 90 days Vacasa Inc is expected to generate 2.27 times more return on investment than PTC. However, Vacasa is 2.27 times more volatile than PTC Inc. It trades about 0.17 of its potential returns per unit of risk. PTC Inc is currently generating about -0.12 per unit of risk. If you would invest  381.00  in Vacasa Inc on December 27, 2024 and sell it today you would earn a total of  159.00  from holding Vacasa Inc or generate 41.73% return on investment over 90 days.

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

Vacasa Inc  vs.  PTC Inc

Vacasa Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vacasa Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Vacasa sustained solid returns over the last few months and may actually be approaching a breakup point.

PTC Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTC Inc 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 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.

Pair Trading with Vacasa and PTC

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

The idea behind Vacasa Inc and PTC Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.