Correlation Between Otc Markets and PSB Holdings

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Can any of the company-specific risk be diversified away by investing in both Otc Markets and PSB Holdings 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 Otc Markets and PSB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otc Markets Group and PSB Holdings, you can compare the effects of market volatilities on Otc Markets and PSB Holdings 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 Otc Markets with a short position of PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otc Markets and PSB Holdings.

Diversification Opportunities for Otc Markets and PSB Holdings

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Otc and PSB is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Otc Markets Group and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings and Otc Markets 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 Otc Markets Group are associated (or correlated) with PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of Otc Markets i.e., Otc Markets and PSB Holdings go up and down completely randomly.

Pair Corralation between Otc Markets and PSB Holdings

Given the investment horizon of 90 days Otc Markets Group is expected to generate 1.64 times more return on investment than PSB Holdings. However, Otc Markets is 1.64 times more volatile than PSB Holdings. It trades about -0.04 of its potential returns per unit of risk. PSB Holdings is currently generating about -0.33 per unit of risk. If you would invest  5,350  in Otc Markets Group on September 22, 2024 and sell it today you would lose (90.00) from holding Otc Markets Group or give up 1.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Otc Markets Group  vs.  PSB Holdings

 Performance 
       Timeline  
Otc Markets Group 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Otc Markets Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Otc Markets displayed solid returns over the last few months and may actually be approaching a breakup point.
PSB Holdings 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PSB Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, PSB Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Otc Markets and PSB Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Otc Markets and PSB Holdings

The main advantage of trading using opposite Otc Markets and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otc Markets position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.
The idea behind Otc Markets Group and PSB Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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