Correlation Between Crown Electrokinetics and REX American
Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and REX American 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 REX American 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 REX American Resources, you can compare the effects of market volatilities on Crown Electrokinetics and REX American 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 REX American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and REX American.
Diversification Opportunities for Crown Electrokinetics and REX American
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crown and REX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and REX American Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX American Resources 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 REX American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX American Resources has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and REX American go up and down completely randomly.
Pair Corralation between Crown Electrokinetics and REX American
Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to generate 12.98 times more return on investment than REX American. However, Crown Electrokinetics is 12.98 times more volatile than REX American Resources. It trades about 0.01 of its potential returns per unit of risk. REX American Resources is currently generating about 0.06 per unit of risk. If you would invest 13.00 in Crown Electrokinetics Corp on October 24, 2024 and sell it today you would lose (2.00) from holding Crown Electrokinetics Corp or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Electrokinetics Corp vs. REX American Resources
Performance |
| Timeline |
| Crown Electrokinetics |
| REX American Resources |
Crown Electrokinetics and REX American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Electrokinetics and REX American
The main advantage of trading using opposite Crown Electrokinetics and REX American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Electrokinetics position performs unexpectedly, REX American 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 REX American will offset losses from the drop in REX American's long position.| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
| REX American vs. Innospec | REX American vs. H B Fuller | REX American vs. Quaker Chemical | REX American vs. Minerals Technologies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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