Correlation Between Progressive Planet and Snow Lake

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

By analyzing existing cross correlation between Progressive Planet Solutions and Snow Lake Resources, you can compare the effects of market volatilities on Progressive Planet and Snow Lake 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 Progressive Planet with a short position of Snow Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Planet and Snow Lake.

Diversification Opportunities for Progressive Planet and Snow Lake

-0.84

Correlation Coefficient

Progressive Planet  Snow Lake

Pay attention - limited upside

The 3 months correlation between Progressive and Snow is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Planet Solutions and Snow Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snow Lake Resources and Progressive Planet 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 Progressive Planet Solutions are associated (or correlated) with Snow Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snow Lake Resources has no effect on the direction of Progressive Planet i.e., Progressive Planet and Snow Lake go up and down completely randomly.

Pair Corralation between Progressive Planet and Snow Lake

Assuming the 90 days horizon Progressive Planet Solutions is expected to generate 1.15 times more return on investment than Snow Lake. However, Progressive Planet is 1.15 times more volatile than Snow Lake Resources. It trades about 0.17 of its potential returns per unit of risk. Snow Lake Resources is currently generating about -0.12 per unit of risk. If you would invest  7.30  in Progressive Planet Solutions on September 3, 2024 and sell it today you would earn a total of  5.70  from holding Progressive Planet Solutions or generate 78.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Progressive Planet Solutions  vs.  Snow Lake Resources

Progressive Planet

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

Snow Lake Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snow Lake Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Progressive Planet and Snow Lake

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

The idea behind Progressive Planet Solutions and Snow Lake Resources 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.