Correlation Between NewMarket and Crown Electrokinetics
Can any of the company-specific risk be diversified away by investing in both NewMarket and Crown Electrokinetics 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 NewMarket and Crown Electrokinetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewMarket and Crown Electrokinetics Corp, you can compare the effects of market volatilities on NewMarket and Crown Electrokinetics 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 NewMarket with a short position of Crown Electrokinetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewMarket and Crown Electrokinetics.
Diversification Opportunities for NewMarket and Crown Electrokinetics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NewMarket and Crown is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NewMarket and Crown Electrokinetics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Electrokinetics and NewMarket 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 NewMarket are associated (or correlated) with Crown Electrokinetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Electrokinetics has no effect on the direction of NewMarket i.e., NewMarket and Crown Electrokinetics go up and down completely randomly.
Pair Corralation between NewMarket and Crown Electrokinetics
Considering the 90-day investment horizon NewMarket is expected to under-perform the Crown Electrokinetics. But the stock apears to be less risky and, when comparing its historical volatility, NewMarket is 11.73 times less risky than Crown Electrokinetics. The stock trades about -0.2 of its potential returns per unit of risk. The Crown Electrokinetics Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewMarket vs. Crown Electrokinetics Corp
Performance |
| Timeline |
| NewMarket |
| Crown Electrokinetics |
NewMarket and Crown Electrokinetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewMarket and Crown Electrokinetics
The main advantage of trading using opposite NewMarket and Crown Electrokinetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewMarket position performs unexpectedly, Crown Electrokinetics 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 Crown Electrokinetics will offset losses from the drop in Crown Electrokinetics' long position.| NewMarket vs. H B Fuller | NewMarket vs. Minerals Technologies | NewMarket vs. Quaker Chemical | NewMarket vs. Oil Dri |
| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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