Correlation Between Danimer Scientific and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Danimer Scientific and Flexible Solutions 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 Danimer Scientific and Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danimer Scientific and Flexible Solutions International, you can compare the effects of market volatilities on Danimer Scientific and Flexible Solutions 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 Danimer Scientific with a short position of Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danimer Scientific and Flexible Solutions.
Diversification Opportunities for Danimer Scientific and Flexible Solutions
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Danimer and Flexible is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions and Danimer Scientific 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 Danimer Scientific are associated (or correlated) with Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and Flexible Solutions go up and down completely randomly.
Pair Corralation between Danimer Scientific and Flexible Solutions
Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the Flexible Solutions. In addition to that, Danimer Scientific is 2.43 times more volatile than Flexible Solutions International. It trades about -0.22 of its total potential returns per unit of risk. Flexible Solutions International is currently generating about 0.04 per unit of volatility. If you would invest 406.00 in Flexible Solutions International on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Flexible Solutions International or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danimer Scientific vs. Flexible Solutions Internation
Performance |
| Timeline |
| Danimer Scientific |
| Flexible Solutions |
Danimer Scientific and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danimer Scientific and Flexible Solutions
The main advantage of trading using opposite Danimer Scientific and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danimer Scientific position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Danimer Scientific vs. LyondellBasell Industries NV | Danimer Scientific vs. International Flavors Fragrances | Danimer Scientific vs. Cabot | Danimer Scientific vs. Westlake Chemical |
| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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