Correlation Between Perma Fix and Steelcase
Can any of the company-specific risk be diversified away by investing in both Perma Fix and Steelcase 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 Perma Fix and Steelcase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perma Fix Environmental Svcs and Steelcase, you can compare the effects of market volatilities on Perma Fix and Steelcase 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 Perma Fix with a short position of Steelcase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma Fix and Steelcase.
Diversification Opportunities for Perma Fix and Steelcase
Excellent diversification
The 3 months correlation between Perma and Steelcase is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Svcs and Steelcase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steelcase and Perma Fix 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 Perma Fix Environmental Svcs are associated (or correlated) with Steelcase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steelcase has no effect on the direction of Perma Fix i.e., Perma Fix and Steelcase go up and down completely randomly.
Pair Corralation between Perma Fix and Steelcase
Given the investment horizon of 90 days Perma Fix Environmental Svcs is expected to generate 2.62 times more return on investment than Steelcase. However, Perma Fix is 2.62 times more volatile than Steelcase. It trades about 0.05 of its potential returns per unit of risk. Steelcase is currently generating about 0.12 per unit of risk. If you would invest 1,440 in Perma Fix Environmental Svcs on August 24, 2024 and sell it today you would earn a total of 41.00 from holding Perma Fix Environmental Svcs or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perma Fix Environmental Svcs vs. Steelcase
Performance |
| Timeline |
| Perma Fix Environmental |
| Steelcase |
Perma Fix and Steelcase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perma Fix and Steelcase
The main advantage of trading using opposite Perma Fix and Steelcase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma Fix position performs unexpectedly, Steelcase 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 Steelcase will offset losses from the drop in Steelcase's long position.| Perma Fix vs. Pro Dex | Perma Fix vs. Pure Cycle | Perma Fix vs. Quest Resource Holding | Perma Fix vs. ABIVAX Socit Anonyme |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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