Correlation Between PJT Partners and FB Financial
Can any of the company-specific risk be diversified away by investing in both PJT Partners and FB Financial 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 PJT Partners and FB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJT Partners and FB Financial Corp, you can compare the effects of market volatilities on PJT Partners and FB Financial 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 PJT Partners with a short position of FB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJT Partners and FB Financial.
Diversification Opportunities for PJT Partners and FB Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PJT and FBK is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and FB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FB Financial Corp and PJT Partners 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 PJT Partners are associated (or correlated) with FB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FB Financial Corp has no effect on the direction of PJT Partners i.e., PJT Partners and FB Financial go up and down completely randomly.
Pair Corralation between PJT Partners and FB Financial
Considering the 90-day investment horizon PJT Partners is expected to generate 1.14 times less return on investment than FB Financial. But when comparing it to its historical volatility, PJT Partners is 1.12 times less risky than FB Financial. It trades about 0.17 of its potential returns per unit of risk. FB Financial Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,567 in FB Financial Corp on August 26, 2024 and sell it today you would earn a total of 1,092 from holding FB Financial Corp or generate 23.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJT Partners vs. FB Financial Corp
Performance |
| Timeline |
| PJT Partners |
| FB Financial Corp |
PJT Partners and FB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJT Partners and FB Financial
The main advantage of trading using opposite PJT Partners and FB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJT Partners position performs unexpectedly, FB Financial 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 FB Financial will offset losses from the drop in FB Financial's long position.| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners vs. Moelis Co |
| FB Financial vs. Home Bancorp | FB Financial vs. First Business Financial | FB Financial vs. LINKBANCORP | FB Financial vs. Great Southern Bancorp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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