Correlation Between PATTECH SM and Transport

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

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

Diversification Opportunities for PATTECH SM and Transport

-0.3

Correlation Coefficient

PATTECH SM  Transport

Very good diversification

The 3 months correlation between PATTECH and Transport is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PATTECH SM and Transport of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport and PATTECH SM 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 PATTECH SM are associated (or correlated) with Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport has no effect on the direction of PATTECH SM i.e., PATTECH SM and Transport go up and down completely randomly.

Pair Corralation between PATTECH SM and Transport

Assuming the 90 days trading horizon PATTECH SM is expected to generate 1.63 times more return on investment than Transport. However, PATTECH SM is 1.63 times more volatile than Transport of. It trades about 1.0 of its potential returns per unit of risk. Transport of is currently generating about 0.12 per unit of risk. If you would invest  7,520  in PATTECH SM on April 21, 2025 and sell it today you would earn a total of  4,355  from holding PATTECH SM or generate 57.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	24.62%
Values	Daily Returns

PATTECH SM  vs.  Transport of

PATTECH SM

Risk-Adjusted Performance

Market Crasher

Over the last 90 days PATTECH SM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady basic indicators, PATTECH SM demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Transport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transport of are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Transport exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PATTECH SM and Transport

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

The idea behind PATTECH SM and Transport of 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 Transaction History module to view history of all your transactions and understand their impact on performance.