Correlation Between PNC Infratech and Zota Health

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

Diversification Opportunities for PNC Infratech and Zota Health

-0.02

Correlation Coefficient

PNC Infratech  Zota Health

Good diversification

The 3 months correlation between PNC and Zota is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PNC Infratech Limited and Zota Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zota Health Care 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 Zota Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zota Health Care has no effect on the direction of PNC Infratech i.e., PNC Infratech and Zota Health go up and down completely randomly.

Pair Corralation between PNC Infratech and Zota Health

Assuming the 90 days trading horizon PNC Infratech Limited is expected to under-perform the Zota Health. In addition to that, PNC Infratech is 1.49 times more volatile than Zota Health Care. It trades about -0.11 of its total potential returns per unit of risk. Zota Health Care is currently generating about 0.18 per unit of volatility. If you would invest  61,670  in Zota Health Care on September 29, 2024 and sell it today you would earn a total of  19,690  from holding Zota Health Care or generate 31.93% return on investment over 90 days.

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

PNC Infratech Limited  vs.  Zota Health Care

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 uncertain 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.

Zota Health Care

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zota Health Care are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Zota Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PNC Infratech and Zota Health

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

The idea behind PNC Infratech Limited and Zota Health Care 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.