Correlation Between Foreign Trade and PJT Partners
Can any of the company-specific risk be diversified away by investing in both Foreign Trade and PJT Partners 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 Foreign Trade and PJT Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foreign Trade Bank and PJT Partners, you can compare the effects of market volatilities on Foreign Trade and PJT Partners 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 Foreign Trade with a short position of PJT Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foreign Trade and PJT Partners.
Diversification Opportunities for Foreign Trade and PJT Partners
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Foreign and PJT is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Foreign Trade Bank and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners and Foreign Trade 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 Foreign Trade Bank are associated (or correlated) with PJT Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJT Partners has no effect on the direction of Foreign Trade i.e., Foreign Trade and PJT Partners go up and down completely randomly.
Pair Corralation between Foreign Trade and PJT Partners
Considering the 90-day investment horizon Foreign Trade Bank is expected to generate 0.86 times more return on investment than PJT Partners. However, Foreign Trade Bank is 1.17 times less risky than PJT Partners. It trades about 0.1 of its potential returns per unit of risk. PJT Partners is currently generating about 0.03 per unit of risk. If you would invest 3,441 in Foreign Trade Bank on September 12, 2024 and sell it today you would earn a total of 86.00 from holding Foreign Trade Bank or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Foreign Trade Bank vs. PJT Partners
Performance |
| Timeline |
| Foreign Trade Bank |
| PJT Partners |
Foreign Trade and PJT Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foreign Trade and PJT Partners
The main advantage of trading using opposite Foreign Trade and PJT Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foreign Trade position performs unexpectedly, PJT Partners 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 PJT Partners will offset losses from the drop in PJT Partners' long position.| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners vs. Moelis Co |
Check out your portfolio center.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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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