Correlation Between Progressive Planet and American Helium

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Can any of the company-specific risk be diversified away by investing in both Progressive Planet and American Helium 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 Progressive Planet and American Helium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progressive Planet Solutions and American Helium, you can compare the effects of market volatilities on Progressive Planet and American Helium 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 Progressive Planet with a short position of American Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Planet and American Helium.

Diversification Opportunities for Progressive Planet and American Helium

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between Progressive and American is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Planet Solutions and American Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Helium and Progressive Planet 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 Progressive Planet Solutions are associated (or correlated) with American Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Helium has no effect on the direction of Progressive Planet i.e., Progressive Planet and American Helium go up and down completely randomly.

Pair Corralation between Progressive Planet and American Helium

Assuming the 90 days horizon Progressive Planet Solutions is expected to generate 3.19 times more return on investment than American Helium. However, Progressive Planet is 3.19 times more volatile than American Helium. It trades about 0.08 of its potential returns per unit of risk. American Helium is currently generating about 0.01 per unit of risk. If you would invest  10.00  in Progressive Planet Solutions on November 1, 2024 and sell it today you would earn a total of  2.00  from holding Progressive Planet Solutions or generate 20.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy93.65%
ValuesDaily Returns

Progressive Planet Solutions  vs.  American Helium

 Performance 
       Timeline  
Progressive Planet 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.
American Helium 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days American Helium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, American Helium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Progressive Planet and American Helium Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Progressive Planet and American Helium

The main advantage of trading using opposite Progressive Planet and American Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive Planet position performs unexpectedly, American Helium 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 American Helium will offset losses from the drop in American Helium's long position.
The idea behind Progressive Planet Solutions and American Helium 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.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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