Correlation Between PNC Infratech and Pritish Nandy

Can any of the company-specific risk be diversified away by investing in both PNC Infratech and Pritish Nandy 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 Pritish Nandy 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 Pritish Nandy Communications, you can compare the effects of market volatilities on PNC Infratech and Pritish Nandy 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 Pritish Nandy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Infratech and Pritish Nandy.

Diversification Opportunities for PNC Infratech and Pritish Nandy

0.62

Correlation Coefficient

PNC Infratech  Pritish Nandy

Poor diversification

The 3 months correlation between PNC and Pritish is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PNC Infratech Limited and Pritish Nandy Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pritish Nandy Commun 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 Pritish Nandy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pritish Nandy Commun has no effect on the direction of PNC Infratech i.e., PNC Infratech and Pritish Nandy go up and down completely randomly.

Pair Corralation between PNC Infratech and Pritish Nandy

Assuming the 90 days trading horizon PNC Infratech Limited is expected to under-perform the Pritish Nandy. In addition to that, PNC Infratech is 1.17 times more volatile than Pritish Nandy Communications. It trades about -0.1 of its total potential returns per unit of risk. Pritish Nandy Communications is currently generating about -0.06 per unit of volatility. If you would invest  6,874  in Pritish Nandy Communications on September 28, 2024 and sell it today you would lose (1,058) from holding Pritish Nandy Communications or give up 15.39% of portfolio value over 90 days.

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

PNC Infratech Limited  vs.  Pritish Nandy Communications

PNC Infratech Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PNC Infratech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pritish Nandy Commun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pritish Nandy Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PNC Infratech and Pritish Nandy

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

The idea behind PNC Infratech Limited and Pritish Nandy Communications 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.