Correlation Between Pressure Technologies and Trellus Health
Can any of the company-specific risk be diversified away by investing in both Pressure Technologies and Trellus Health 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 Pressure Technologies and Trellus Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pressure Technologies Plc and Trellus Health plc, you can compare the effects of market volatilities on Pressure Technologies and Trellus Health 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 Pressure Technologies with a short position of Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pressure Technologies and Trellus Health.
Diversification Opportunities for Pressure Technologies and Trellus Health
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pressure and Trellus is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pressure Technologies Plc and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health plc and Pressure 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 Pressure Technologies Plc are associated (or correlated) with Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of Pressure Technologies i.e., Pressure Technologies and Trellus Health go up and down completely randomly.
Pair Corralation between Pressure Technologies and Trellus Health
Assuming the 90 days trading horizon Pressure Technologies Plc is expected to generate 0.66 times more return on investment than Trellus Health. However, Pressure Technologies Plc is 1.51 times less risky than Trellus Health. It trades about 0.27 of its potential returns per unit of risk. Trellus Health plc is currently generating about -0.36 per unit of risk. If you would invest 3,550 in Pressure Technologies Plc on October 10, 2024 and sell it today you would earn a total of 300.00 from holding Pressure Technologies Plc or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pressure Technologies Plc vs. Trellus Health plc
Performance |
| Timeline |
| Pressure Technologies Plc |
| Trellus Health plc |
Pressure Technologies and Trellus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pressure Technologies and Trellus Health
The main advantage of trading using opposite Pressure Technologies and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pressure Technologies position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.| Pressure Technologies vs. First Class Metals | Pressure Technologies vs. Europa Metals | Pressure Technologies vs. Deltex Medical Group | Pressure Technologies vs. Zurich Insurance Group |
| Trellus Health vs. Hecla Mining Co | Trellus Health vs. Dalata Hotel Group | Trellus Health vs. National Beverage Corp | Trellus Health vs. Lundin Mining Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |