Correlation Between PJT Partners and EZCORP

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

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

Diversification Opportunities for PJT Partners and EZCORP

-0.77

Correlation Coefficient

PJT Partners  EZCORP

Pay attention - limited upside

The 3 months correlation between PJT and EZCORP is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc and PJT Partners 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 PJT Partners are associated (or correlated) with EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of PJT Partners i.e., PJT Partners and EZCORP go up and down completely randomly.

Pair Corralation between PJT Partners and EZCORP

Considering the 90-day investment horizon PJT Partners is expected to generate 0.87 times more return on investment than EZCORP. However, PJT Partners is 1.15 times less risky than EZCORP. It trades about 0.06 of its potential returns per unit of risk. EZCORP Inc is currently generating about 0.03 per unit of risk. If you would invest  10,144  in PJT Partners on March 2, 2024 and sell it today you would earn a total of  523.00  from holding PJT Partners or generate 5.16% return on investment over 90 days.

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

PJT Partners  vs.  EZCORP Inc

PJT Partners

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PJT Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, PJT Partners is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

EZCORP Inc

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, EZCORP is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PJT Partners and EZCORP

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

The idea behind PJT Partners and EZCORP Inc 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..