Correlation Between PureCycle Technologies and Elah Holdings
Can any of the company-specific risk be diversified away by investing in both PureCycle Technologies and Elah Holdings 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 PureCycle Technologies and Elah Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureCycle Technologies and Elah Holdings, you can compare the effects of market volatilities on PureCycle Technologies and Elah Holdings 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 PureCycle Technologies with a short position of Elah Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and Elah Holdings.
Diversification Opportunities for PureCycle Technologies and Elah Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PureCycle and Elah is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Elah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elah Holdings and PureCycle Technologies 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 PureCycle Technologies are associated (or correlated) with Elah Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elah Holdings has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Elah Holdings go up and down completely randomly.
Pair Corralation between PureCycle Technologies and Elah Holdings
Assuming the 90 days horizon PureCycle Technologies is expected to generate 0.53 times more return on investment than Elah Holdings. However, PureCycle Technologies is 1.9 times less risky than Elah Holdings. It trades about 0.11 of its potential returns per unit of risk. Elah Holdings is currently generating about 0.0 per unit of risk. If you would invest 390.00 in PureCycle Technologies on September 16, 2024 and sell it today you would earn a total of 35.00 from holding PureCycle Technologies or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureCycle Technologies vs. Elah Holdings
Performance |
| Timeline |
| PureCycle Technologies |
| Elah Holdings |
PureCycle Technologies and Elah Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureCycle Technologies and Elah Holdings
The main advantage of trading using opposite PureCycle Technologies and Elah Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureCycle Technologies position performs unexpectedly, Elah Holdings 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 Elah Holdings will offset losses from the drop in Elah Holdings' long position.| PureCycle Technologies vs. Origin Materials Warrant | PureCycle Technologies vs. Purecycle Technologies Holdings | PureCycle Technologies vs. Blade Air Mobility |
| Elah Holdings vs. Advantage Solutions | Elah Holdings vs. Atlas Corp | Elah Holdings vs. PureCycle Technologies | Elah Holdings vs. WM Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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