Correlation Between Natural Alternatives and Paragon Technologies
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives and Paragon Technologies 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 Natural Alternatives and Paragon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and Paragon Technologies, you can compare the effects of market volatilities on Natural Alternatives and Paragon Technologies 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 Natural Alternatives with a short position of Paragon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and Paragon Technologies.
Diversification Opportunities for Natural Alternatives and Paragon Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and Paragon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and Paragon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Technologies and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with Paragon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Technologies has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and Paragon Technologies go up and down completely randomly.
Pair Corralation between Natural Alternatives and Paragon Technologies
Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the Paragon Technologies. In addition to that, Natural Alternatives is 1.02 times more volatile than Paragon Technologies. It trades about -0.02 of its total potential returns per unit of risk. Paragon Technologies is currently generating about 0.02 per unit of volatility. If you would invest 740.00 in Paragon Technologies on September 3, 2024 and sell it today you would earn a total of 25.00 from holding Paragon Technologies or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. Paragon Technologies
Performance |
| Timeline |
| Natural Alternatives |
| Paragon Technologies |
Natural Alternatives and Paragon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and Paragon Technologies
The main advantage of trading using opposite Natural Alternatives and Paragon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives position performs unexpectedly, Paragon Technologies 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 Paragon Technologies will offset losses from the drop in Paragon Technologies' long position.| Natural Alternatives vs. FitLife Brands, Common | Natural Alternatives vs. Lifeway Foods | Natural Alternatives vs. Else Nutrition Holdings | Natural Alternatives vs. Central Garden Pet |
| Paragon Technologies vs. Eline Entertainment Group | Paragon Technologies vs. Green Leaf Innovations | Paragon Technologies vs. Plandai Biotech | Paragon Technologies vs. All American Gld |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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