Correlation Between Xp and PJT Partners
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and PJT Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and PJT Partners, you can compare the effects of market volatilities on Xp 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 Xp with a short position of PJT Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and PJT Partners.
Diversification Opportunities for Xp and PJT Partners
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xp and PJT is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners and Xp 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 Xp Inc 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 Xp i.e., Xp and PJT Partners go up and down completely randomly.
Pair Corralation between Xp and PJT Partners
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the PJT Partners. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 1.3 times less risky than PJT Partners. The stock trades about -0.29 of its potential returns per unit of risk. The PJT Partners is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 13,782 in PJT Partners on August 31, 2024 and sell it today you would earn a total of 2,737 from holding PJT Partners or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. PJT Partners
Performance |
| Timeline |
| Xp Inc |
| PJT Partners |
Xp and PJT Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and PJT Partners
The main advantage of trading using opposite Xp and PJT Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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