Correlation Between PTC and Neogrid Participaes

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

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

Diversification Opportunities for PTC and Neogrid Participaes

0.19

Correlation Coefficient

PTC  Neogrid Participaes

Average diversification

The 3 months correlation between PTC and Neogrid is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PTC Inc and Neogrid Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogrid Participaes 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 Neogrid Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogrid Participaes has no effect on the direction of PTC i.e., PTC and Neogrid Participaes go up and down completely randomly.

Pair Corralation between PTC and Neogrid Participaes

Considering the 90-day investment horizon PTC Inc is expected to generate 0.73 times more return on investment than Neogrid Participaes. However, PTC Inc is 1.36 times less risky than Neogrid Participaes. It trades about 0.17 of its potential returns per unit of risk. Neogrid Participaes SA is currently generating about 0.12 per unit of risk. If you would invest  16,133  in PTC Inc on May 4, 2025 and sell it today you would earn a total of  5,078  from holding PTC Inc or generate 31.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

PTC Inc  vs.  Neogrid Participaes SA

PTC Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, PTC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Neogrid Participaes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neogrid Participaes SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Neogrid Participaes unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PTC and Neogrid Participaes

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

The idea behind PTC Inc and Neogrid Participaes SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.