Correlation Between Perma-Fix Environmental and SERI INDUSTRIAL
Can any of the company-specific risk be diversified away by investing in both Perma-Fix Environmental and SERI INDUSTRIAL 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 Environmental and SERI INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perma Fix Environmental Services and SERI INDUSTRIAL EO, you can compare the effects of market volatilities on Perma-Fix Environmental and SERI INDUSTRIAL 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 Environmental with a short position of SERI INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma-Fix Environmental and SERI INDUSTRIAL.
Diversification Opportunities for Perma-Fix Environmental and SERI INDUSTRIAL
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Perma-Fix and SERI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO and Perma-Fix Environmental 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 Services are associated (or correlated) with SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Perma-Fix Environmental i.e., Perma-Fix Environmental and SERI INDUSTRIAL go up and down completely randomly.
Pair Corralation between Perma-Fix Environmental and SERI INDUSTRIAL
Assuming the 90 days trading horizon Perma-Fix Environmental is expected to generate 1.47 times less return on investment than SERI INDUSTRIAL. But when comparing it to its historical volatility, Perma Fix Environmental Services is 1.1 times less risky than SERI INDUSTRIAL. It trades about 0.04 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 280.00 in SERI INDUSTRIAL EO on September 1, 2024 and sell it today you would earn a total of 8.00 from holding SERI INDUSTRIAL EO or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perma Fix Environmental Servic vs. SERI INDUSTRIAL EO
Performance |
| Timeline |
| Perma Fix Environmental |
| SERI INDUSTRIAL EO |
Perma-Fix Environmental and SERI INDUSTRIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perma-Fix Environmental and SERI INDUSTRIAL
The main advantage of trading using opposite Perma-Fix Environmental and SERI INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perma-Fix Environmental position performs unexpectedly, SERI INDUSTRIAL 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 SERI INDUSTRIAL will offset losses from the drop in SERI INDUSTRIAL's long position.| Perma-Fix Environmental vs. Veolia Environnement SA | Perma-Fix Environmental vs. Superior Plus Corp | Perma-Fix Environmental vs. NMI Holdings | Perma-Fix Environmental vs. Origin Agritech |
| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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