Correlation Between Teamlease Services and PNC Infratech

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

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

Diversification Opportunities for Teamlease Services and PNC Infratech

0.5

Correlation Coefficient

Teamlease Services  PNC Infratech

Very weak diversification

The 3 months correlation between Teamlease and PNC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Teamlease Services Limited and PNC Infratech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Infratech Limited and Teamlease Services 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 Teamlease Services Limited are associated (or correlated) with PNC Infratech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Infratech Limited has no effect on the direction of Teamlease Services i.e., Teamlease Services and PNC Infratech go up and down completely randomly.

Pair Corralation between Teamlease Services and PNC Infratech

Assuming the 90 days trading horizon Teamlease Services Limited is expected to under-perform the PNC Infratech. In addition to that, Teamlease Services is 1.01 times more volatile than PNC Infratech Limited. It trades about -0.01 of its total potential returns per unit of risk. PNC Infratech Limited is currently generating about 0.13 per unit of volatility. If you would invest  27,480  in PNC Infratech Limited on April 25, 2025 and sell it today you would earn a total of  4,155  from holding PNC Infratech Limited or generate 15.12% return on investment over 90 days.

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

Teamlease Services Limited  vs.  PNC Infratech Limited

Teamlease Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teamlease Services Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Teamlease Services is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, PNC Infratech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teamlease Services and PNC Infratech

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

The idea behind Teamlease Services Limited and PNC Infratech 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.