Correlation Between SinterCast and Physitrack PLC

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

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

Diversification Opportunities for SinterCast and Physitrack PLC

0.6

Correlation Coefficient

SinterCast  Physitrack PLC

Poor diversification

The 3 months correlation between SinterCast and Physitrack is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SinterCast AB and Physitrack PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Physitrack PLC and SinterCast 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 SinterCast AB are associated (or correlated) with Physitrack PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Physitrack PLC has no effect on the direction of SinterCast i.e., SinterCast and Physitrack PLC go up and down completely randomly.

Pair Corralation between SinterCast and Physitrack PLC

Assuming the 90 days trading horizon SinterCast is expected to generate 2.44 times less return on investment than Physitrack PLC. But when comparing it to its historical volatility, SinterCast AB is 2.57 times less risky than Physitrack PLC. It trades about 0.1 of its potential returns per unit of risk. Physitrack PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,120  in Physitrack PLC on April 20, 2025 and sell it today you would earn a total of  295.00  from holding Physitrack PLC or generate 26.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.77%
Values	Daily Returns

SinterCast AB  vs.  Physitrack PLC

SinterCast AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SinterCast AB are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SinterCast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Physitrack PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Physitrack PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Physitrack PLC is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SinterCast and Physitrack PLC

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

The idea behind SinterCast AB and Physitrack PLC 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.