Correlation Between Crown Electrokinetics and Neo Performance
Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and Neo Performance 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 Neo Performance 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 Neo Performance Materials, you can compare the effects of market volatilities on Crown Electrokinetics and Neo Performance 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 Neo Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Neo Performance.
Diversification Opportunities for Crown Electrokinetics and Neo Performance
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crown and Neo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Neo Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Performance Materials 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 Neo Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Performance Materials has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Neo Performance go up and down completely randomly.
Pair Corralation between Crown Electrokinetics and Neo Performance
Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Neo Performance. In addition to that, Crown Electrokinetics is 8.87 times more volatile than Neo Performance Materials. It trades about -0.05 of its total potential returns per unit of risk. Neo Performance Materials is currently generating about 0.01 per unit of volatility. If you would invest 582.00 in Neo Performance Materials on August 30, 2024 and sell it today you would lose (20.00) from holding Neo Performance Materials or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Crown Electrokinetics Corp vs. Neo Performance Materials
Performance |
| Timeline |
| Crown Electrokinetics |
| Neo Performance Materials |
Crown Electrokinetics and Neo Performance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Electrokinetics and Neo Performance
The main advantage of trading using opposite Crown Electrokinetics and Neo Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Electrokinetics position performs unexpectedly, Neo Performance 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 Neo Performance will offset losses from the drop in Neo Performance's long position.| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
| Neo Performance vs. Akzo Nobel NV | Neo Performance vs. Avoca LLC | Neo Performance vs. Arkema SA ADR | Neo Performance vs. HUMANA INC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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