Correlation Between PJT Partners and MarketAxess Holdings

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

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

Diversification Opportunities for PJT Partners and MarketAxess Holdings

0.44

Correlation Coefficient

PJT Partners  MarketAxess Holdings

Very weak diversification

The 3 months correlation between PJT and MarketAxess is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings and PJT Partners 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 PJT Partners are associated (or correlated) with MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of PJT Partners i.e., PJT Partners and MarketAxess Holdings go up and down completely randomly.

Pair Corralation between PJT Partners and MarketAxess Holdings

Considering the 90-day investment horizon PJT Partners is expected to generate 1.55 times more return on investment than MarketAxess Holdings. However, PJT Partners is 1.55 times more volatile than MarketAxess Holdings. It trades about 0.23 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about 0.09 per unit of risk. If you would invest  11,814  in PJT Partners on August 31, 2024 and sell it today you would earn a total of  4,705  from holding PJT Partners or generate 39.83% return on investment over 90 days.

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

PJT Partners  vs.  MarketAxess Holdings

PJT Partners

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PJT Partners are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking indicators, PJT Partners unveiled solid returns over the last few months and may actually be approaching a breakup point.

MarketAxess Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MarketAxess Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MarketAxess Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with PJT Partners and MarketAxess Holdings

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

The idea behind PJT Partners and MarketAxess 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..