Correlation Between SEAZEN GROUP and Perma-Fix Environmental
Can any of the company-specific risk be diversified away by investing in both SEAZEN GROUP and Perma-Fix Environmental 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 SEAZEN GROUP and Perma-Fix Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEAZEN GROUP LTD and Perma Fix Environmental Services, you can compare the effects of market volatilities on SEAZEN GROUP and Perma-Fix Environmental 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 SEAZEN GROUP with a short position of Perma-Fix Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEAZEN GROUP and Perma-Fix Environmental.
Diversification Opportunities for SEAZEN GROUP and Perma-Fix Environmental
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEAZEN and Perma-Fix is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SEAZEN GROUP LTD and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and SEAZEN GROUP 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 SEAZEN GROUP LTD are associated (or correlated) with Perma-Fix Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of SEAZEN GROUP i.e., SEAZEN GROUP and Perma-Fix Environmental go up and down completely randomly.
Pair Corralation between SEAZEN GROUP and Perma-Fix Environmental
Assuming the 90 days trading horizon SEAZEN GROUP LTD is expected to under-perform the Perma-Fix Environmental. But the stock apears to be less risky and, when comparing its historical volatility, SEAZEN GROUP LTD is 1.42 times less risky than Perma-Fix Environmental. The stock trades about -0.2 of its potential returns per unit of risk. The Perma Fix Environmental Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,330 in Perma Fix Environmental Services on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Perma Fix Environmental Services or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SEAZEN GROUP LTD vs. Perma Fix Environmental Servic
Performance |
| Timeline |
| SEAZEN GROUP LTD |
| Perma Fix Environmental |
SEAZEN GROUP and Perma-Fix Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEAZEN GROUP and Perma-Fix Environmental
The main advantage of trading using opposite SEAZEN GROUP and Perma-Fix Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEAZEN GROUP position performs unexpectedly, Perma-Fix Environmental 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 Perma-Fix Environmental will offset losses from the drop in Perma-Fix Environmental's long position.| SEAZEN GROUP vs. China Resources Land | SEAZEN GROUP vs. CTP NV EO | SEAZEN GROUP vs. Superior Plus Corp | SEAZEN GROUP vs. NMI Holdings |
| Perma-Fix Environmental vs. Veolia Environnement SA | Perma-Fix Environmental vs. GFL ENVIRONM | Perma-Fix Environmental vs. Superior Plus Corp | Perma-Fix Environmental vs. NMI Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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