Correlation Between PPLA Participations and Crown Castle

Can any of the company-specific risk be diversified away by investing in both PPLA Participations and Crown Castle 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 PPLA Participations and Crown Castle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PPLA Participations and Crown Castle International, you can compare the effects of market volatilities on PPLA Participations and Crown Castle 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 PPLA Participations with a short position of Crown Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPLA Participations and Crown Castle.

Diversification Opportunities for PPLA Participations and Crown Castle

0.61

Correlation Coefficient

PPLA Participations  Crown Castle

Poor diversification

The 3 months correlation between PPLA and Crown is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PPLA Participations and Crown Castle International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle Interna and PPLA Participations 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 PPLA Participations are associated (or correlated) with Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle Interna has no effect on the direction of PPLA Participations i.e., PPLA Participations and Crown Castle go up and down completely randomly.

Pair Corralation between PPLA Participations and Crown Castle

Assuming the 90 days trading horizon PPLA Participations is expected to under-perform the Crown Castle. In addition to that, PPLA Participations is 1.69 times more volatile than Crown Castle International. It trades about -0.14 of its total potential returns per unit of risk. Crown Castle International is currently generating about -0.04 per unit of volatility. If you would invest  15,524  in Crown Castle International on September 26, 2024 and sell it today you would lose (1,580) from holding Crown Castle International or give up 10.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

PPLA Participations  vs.  Crown Castle International

PPLA Participations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PPLA Participations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Crown Castle Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Castle International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with PPLA Participations and Crown Castle

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

The idea behind PPLA Participations and Crown Castle International 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.