Correlation Between PureCycle Technologies and Themac Resources
Can any of the company-specific risk be diversified away by investing in both PureCycle Technologies and Themac Resources 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 Themac Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureCycle Technologies and Themac Resources Group, you can compare the effects of market volatilities on PureCycle Technologies and Themac Resources 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 Themac Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and Themac Resources.
Diversification Opportunities for PureCycle Technologies and Themac Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PureCycle and Themac is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Themac Resources Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themac Resources 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 Themac Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themac Resources has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Themac Resources go up and down completely randomly.
Pair Corralation between PureCycle Technologies and Themac Resources
Assuming the 90 days horizon PureCycle Technologies is expected to generate 4.7 times less return on investment than Themac Resources. But when comparing it to its historical volatility, PureCycle Technologies is 2.51 times less risky than Themac Resources. It trades about 0.12 of its potential returns per unit of risk. Themac Resources Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Themac Resources Group on September 3, 2024 and sell it today you would earn a total of 1.70 from holding Themac Resources Group or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureCycle Technologies vs. Themac Resources Group
Performance |
| Timeline |
| PureCycle Technologies |
| Themac Resources |
PureCycle Technologies and Themac Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureCycle Technologies and Themac Resources
The main advantage of trading using opposite PureCycle Technologies and Themac Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureCycle Technologies position performs unexpectedly, Themac Resources 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 Themac Resources will offset losses from the drop in Themac Resources' long position.| PureCycle Technologies vs. Origin Materials Warrant | PureCycle Technologies vs. Purecycle Technologies Holdings | PureCycle Technologies vs. Blade Air Mobility |
| Themac Resources vs. Advantage Solutions | Themac Resources vs. Atlas Corp | Themac Resources vs. PureCycle Technologies | Themac Resources 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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