Correlation Between Artemis Strategic and Procyon

Can any of the company-specific risk be diversified away by investing in both Artemis Strategic and Procyon 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 Artemis Strategic and Procyon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artemis Strategic Investment and Procyon, you can compare the effects of market volatilities on Artemis Strategic and Procyon 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 Artemis Strategic with a short position of Procyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artemis Strategic and Procyon.

Diversification Opportunities for Artemis Strategic and Procyon

-0.33

Correlation Coefficient

Artemis Strategic  Procyon

Very good diversification

The 3 months correlation between Artemis and Procyon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Artemis Strategic Investment and Procyon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procyon and Artemis Strategic 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 Artemis Strategic Investment are associated (or correlated) with Procyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procyon has no effect on the direction of Artemis Strategic i.e., Artemis Strategic and Procyon go up and down completely randomly.

Pair Corralation between Artemis Strategic and Procyon

Given the investment horizon of 90 days Artemis Strategic is expected to generate 6.41 times less return on investment than Procyon. But when comparing it to its historical volatility, Artemis Strategic Investment is 41.05 times less risky than Procyon. It trades about 0.18 of its potential returns per unit of risk. Procyon is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  27.00  in Procyon on September 29, 2024 and sell it today you would lose (3.00) from holding Procyon or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	27.36%
Values	Daily Returns

Artemis Strategic Investment  vs.  Procyon

Artemis Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artemis Strategic Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Artemis Strategic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procyon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Procyon is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Artemis Strategic and Procyon

The main advantage of trading using opposite Artemis Strategic and Procyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artemis Strategic position performs unexpectedly, Procyon 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 Procyon will offset losses from the drop in Procyon's long position.

The idea behind Artemis Strategic Investment and Procyon 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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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.