Correlation Between PSB Holdings and CreditRiskMonitorCom

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

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

Diversification Opportunities for PSB Holdings and CreditRiskMonitorCom

0.8

Correlation Coefficient

PSB Holdings  CreditRiskMonitorCom

Very poor diversification

The 3 months correlation between PSB and CreditRiskMonitorCom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding PSB Holdings and CreditRiskMonitorCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CreditRiskMonitorCom and PSB Holdings 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 PSB Holdings are associated (or correlated) with CreditRiskMonitorCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CreditRiskMonitorCom has no effect on the direction of PSB Holdings i.e., PSB Holdings and CreditRiskMonitorCom go up and down completely randomly.

Pair Corralation between PSB Holdings and CreditRiskMonitorCom

Given the investment horizon of 90 days PSB Holdings is expected to generate 5.75 times less return on investment than CreditRiskMonitorCom. But when comparing it to its historical volatility, PSB Holdings is 3.36 times less risky than CreditRiskMonitorCom. It trades about 0.08 of its potential returns per unit of risk. CreditRiskMonitorCom is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  235.00  in CreditRiskMonitorCom on September 22, 2024 and sell it today you would earn a total of  73.00  from holding CreditRiskMonitorCom or generate 31.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

PSB Holdings  vs.  CreditRiskMonitorCom

PSB Holdings

Risk-Adjusted Performance

6 of 100

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.

CreditRiskMonitorCom

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CreditRiskMonitorCom are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, CreditRiskMonitorCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PSB Holdings and CreditRiskMonitorCom

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

The idea behind PSB Holdings and CreditRiskMonitorCom 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.