Correlation Between Crown Electrokinetics and Balchem
Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and Balchem 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 Crown Electrokinetics and Balchem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Electrokinetics Corp and Balchem, you can compare the effects of market volatilities on Crown Electrokinetics and Balchem 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 Crown Electrokinetics with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Balchem.
Diversification Opportunities for Crown Electrokinetics and Balchem
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crown and Balchem is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Balchem go up and down completely randomly.
Pair Corralation between Crown Electrokinetics and Balchem
Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Balchem. In addition to that, Crown Electrokinetics is 15.72 times more volatile than Balchem. It trades about -0.28 of its total potential returns per unit of risk. Balchem is currently generating about 0.04 per unit of volatility. If you would invest 15,858 in Balchem on November 3, 2024 and sell it today you would earn a total of 138.00 from holding Balchem or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Electrokinetics Corp vs. Balchem
Performance |
| Timeline |
| Crown Electrokinetics |
| Balchem |
Crown Electrokinetics and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Electrokinetics and Balchem
The main advantage of trading using opposite Crown Electrokinetics and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Electrokinetics position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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