Correlation Between Performance Technologies and Elvalhalcor Hellenic
Can any of the company-specific risk be diversified away by investing in both Performance Technologies and Elvalhalcor Hellenic 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 Performance Technologies and Elvalhalcor Hellenic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Technologies SA and Elvalhalcor Hellenic Copper, you can compare the effects of market volatilities on Performance Technologies and Elvalhalcor Hellenic 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 Performance Technologies with a short position of Elvalhalcor Hellenic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Technologies and Elvalhalcor Hellenic.
Diversification Opportunities for Performance Technologies and Elvalhalcor Hellenic
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Performance and Elvalhalcor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Performance Technologies SA and Elvalhalcor Hellenic Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elvalhalcor Hellenic and Performance 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 Performance Technologies SA are associated (or correlated) with Elvalhalcor Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elvalhalcor Hellenic has no effect on the direction of Performance Technologies i.e., Performance Technologies and Elvalhalcor Hellenic go up and down completely randomly.
Pair Corralation between Performance Technologies and Elvalhalcor Hellenic
Assuming the 90 days trading horizon Performance Technologies SA is expected to generate 1.02 times more return on investment than Elvalhalcor Hellenic. However, Performance Technologies is 1.02 times more volatile than Elvalhalcor Hellenic Copper. It trades about 0.05 of its potential returns per unit of risk. Elvalhalcor Hellenic Copper is currently generating about 0.03 per unit of risk. If you would invest 359.00 in Performance Technologies SA on September 4, 2024 and sell it today you would earn a total of 172.00 from holding Performance Technologies SA or generate 47.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Technologies SA vs. Elvalhalcor Hellenic Copper
Performance |
| Timeline |
| Performance Technologies |
| Elvalhalcor Hellenic |
Performance Technologies and Elvalhalcor Hellenic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Technologies and Elvalhalcor Hellenic
The main advantage of trading using opposite Performance Technologies and Elvalhalcor Hellenic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Technologies position performs unexpectedly, Elvalhalcor Hellenic 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 Elvalhalcor Hellenic will offset losses from the drop in Elvalhalcor Hellenic's long position.The idea behind Performance Technologies SA and Elvalhalcor Hellenic Copper 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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