Correlation Between Perimeter Solutions and Select Energy
Can any of the company-specific risk be diversified away by investing in both Perimeter Solutions and Select Energy 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 Perimeter Solutions and Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perimeter Solutions SA and Select Energy Services, you can compare the effects of market volatilities on Perimeter Solutions and Select Energy 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 Perimeter Solutions with a short position of Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Solutions and Select Energy.
Diversification Opportunities for Perimeter Solutions and Select Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perimeter and Select is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services and Perimeter Solutions 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 Perimeter Solutions SA are associated (or correlated) with Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Perimeter Solutions i.e., Perimeter Solutions and Select Energy go up and down completely randomly.
Pair Corralation between Perimeter Solutions and Select Energy
Considering the 90-day investment horizon Perimeter Solutions SA is expected to generate 1.29 times more return on investment than Select Energy. However, Perimeter Solutions is 1.29 times more volatile than Select Energy Services. It trades about -0.01 of its potential returns per unit of risk. Select Energy Services is currently generating about -0.05 per unit of risk. If you would invest 1,278 in Perimeter Solutions SA on November 1, 2024 and sell it today you would lose (16.00) from holding Perimeter Solutions SA or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Perimeter Solutions SA vs. Select Energy Services
Performance |
| Timeline |
| Perimeter Solutions |
| Select Energy Services |
Perimeter Solutions and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perimeter Solutions and Select Energy
The main advantage of trading using opposite Perimeter Solutions and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Solutions position performs unexpectedly, Select Energy 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 Select Energy will offset losses from the drop in Select Energy's long position.| Perimeter Solutions vs. Kronos Worldwide | Perimeter Solutions vs. Sensient Technologies | Perimeter Solutions vs. Element Solutions | Perimeter Solutions vs. Trinseo SA |
| Select Energy vs. Cannabusiness Group | Select Energy vs. Dewmar Intl Bmc | Select Energy vs. Aquagold International | Select Energy vs. Morningstar Unconstrained Allocation |
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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