Correlation Between PTC and Linamar

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

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

Diversification Opportunities for PTC and Linamar

0.81

Correlation Coefficient

PTC  Linamar

Very poor diversification

The 3 months correlation between PTC and Linamar is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PTC Inc and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and PTC 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 PTC Inc are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of PTC i.e., PTC and Linamar go up and down completely randomly.

Pair Corralation between PTC and Linamar

Considering the 90-day investment horizon PTC Inc is expected to generate 2.01 times more return on investment than Linamar. However, PTC is 2.01 times more volatile than Linamar. It trades about 0.11 of its potential returns per unit of risk. Linamar is currently generating about 0.19 per unit of risk. If you would invest  17,239  in PTC Inc on May 19, 2025 and sell it today you would earn a total of  3,345  from holding PTC Inc or generate 19.4% return on investment over 90 days.

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

PTC Inc  vs.  Linamar

PTC Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PTC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Linamar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Linamar are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Linamar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTC and Linamar

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

The idea behind PTC Inc and Linamar 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.