Correlation Between PureCycle Technologies and Maple Gold
Can any of the company-specific risk be diversified away by investing in both PureCycle Technologies and Maple Gold 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 Maple Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureCycle Technologies and Maple Gold Mines, you can compare the effects of market volatilities on PureCycle Technologies and Maple Gold 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 Maple Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and Maple Gold.
Diversification Opportunities for PureCycle Technologies and Maple Gold
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PureCycle and Maple is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Maple Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Gold Mines 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 Maple Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Gold Mines has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Maple Gold go up and down completely randomly.
Pair Corralation between PureCycle Technologies and Maple Gold
Assuming the 90 days horizon PureCycle Technologies is expected to generate 0.61 times more return on investment than Maple Gold. However, PureCycle Technologies is 1.64 times less risky than Maple Gold. It trades about 0.1 of its potential returns per unit of risk. Maple Gold Mines is currently generating about -0.05 per unit of risk. If you would invest 416.00 in PureCycle Technologies on September 14, 2024 and sell it today you would earn a total of 34.00 from holding PureCycle Technologies or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PureCycle Technologies vs. Maple Gold Mines
Performance |
| Timeline |
| PureCycle Technologies |
| Maple Gold Mines |
PureCycle Technologies and Maple Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PureCycle Technologies and Maple Gold
The main advantage of trading using opposite PureCycle Technologies and Maple Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureCycle Technologies position performs unexpectedly, Maple Gold 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 Maple Gold will offset losses from the drop in Maple Gold's long position.The idea behind PureCycle Technologies and Maple Gold Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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