Correlation Between PJT Partners and Houlihan Lokey
Can any of the company-specific risk be diversified away by investing in both PJT Partners and Houlihan Lokey 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 Houlihan Lokey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJT Partners and Houlihan Lokey, you can compare the effects of market volatilities on PJT Partners and Houlihan Lokey 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 Houlihan Lokey. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJT Partners and Houlihan Lokey.
Diversification Opportunities for PJT Partners and Houlihan Lokey
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PJT and Houlihan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey 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 Houlihan Lokey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houlihan Lokey has no effect on the direction of PJT Partners i.e., PJT Partners and Houlihan Lokey go up and down completely randomly.
Pair Corralation between PJT Partners and Houlihan Lokey
Considering the 90-day investment horizon PJT Partners is expected to generate 1.3 times more return on investment than Houlihan Lokey. However, PJT Partners is 1.3 times more volatile than Houlihan Lokey. It trades about 0.14 of its potential returns per unit of risk. Houlihan Lokey is currently generating about 0.17 per unit of risk. If you would invest 8,516 in PJT Partners on August 24, 2024 and sell it today you would earn a total of 7,565 from holding PJT Partners or generate 88.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJT Partners vs. Houlihan Lokey
Performance |
| Timeline |
| PJT Partners |
| Houlihan Lokey |
PJT Partners and Houlihan Lokey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJT Partners and Houlihan Lokey
The main advantage of trading using opposite PJT Partners and Houlihan Lokey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJT Partners position performs unexpectedly, Houlihan Lokey 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 Houlihan Lokey will offset losses from the drop in Houlihan Lokey's long position.| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners vs. Moelis Co |
| Houlihan Lokey vs. Lazard | Houlihan Lokey vs. PJT Partners | Houlihan Lokey vs. Moelis Co | Houlihan Lokey vs. Piper Sandler Companies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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