Correlation Between PNC Infratech and Aptech

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

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

Diversification Opportunities for PNC Infratech and Aptech

0.03

Correlation Coefficient

PNC Infratech  Aptech

Significant diversification

The 3 months correlation between PNC and Aptech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PNC Infratech Limited and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited and PNC Infratech 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 PNC Infratech Limited are associated (or correlated) with Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of PNC Infratech i.e., PNC Infratech and Aptech go up and down completely randomly.

Pair Corralation between PNC Infratech and Aptech

Assuming the 90 days trading horizon PNC Infratech is expected to generate 1.16 times less return on investment than Aptech. But when comparing it to its historical volatility, PNC Infratech Limited is 1.98 times less risky than Aptech. It trades about 0.11 of its potential returns per unit of risk. Aptech Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  12,783  in Aptech Limited on April 22, 2025 and sell it today you would earn a total of  1,471  from holding Aptech Limited or generate 11.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PNC Infratech Limited  vs.  Aptech Limited

PNC Infratech Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PNC Infratech Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, PNC Infratech reported solid returns over the last few months and may actually be approaching a breakup point.

Aptech Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptech Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Aptech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PNC Infratech and Aptech

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

The idea behind PNC Infratech Limited and Aptech Limited 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.