Correlation Between Cemtrex Pref and Perla Group

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

By analyzing existing cross correlation between Cemtrex Pref and Perla Group International, you can compare the effects of market volatilities on Cemtrex Pref and Perla Group 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 Cemtrex Pref with a short position of Perla Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtrex Pref and Perla Group.

Diversification Opportunities for Cemtrex Pref and Perla Group

0.0

Correlation Coefficient

Cemtrex Pref  Perla Group

Pay attention - limited upside

The 3 months correlation between Cemtrex and Perla is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex Pref and Perla Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perla Group International and Cemtrex Pref 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 Cemtrex Pref are associated (or correlated) with Perla Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perla Group International has no effect on the direction of Cemtrex Pref i.e., Cemtrex Pref and Perla Group go up and down completely randomly.

Pair Corralation between Cemtrex Pref and Perla Group

Assuming the 90 days horizon Cemtrex Pref is expected to generate 5.74 times less return on investment than Perla Group. But when comparing it to its historical volatility, Cemtrex Pref is 8.06 times less risky than Perla Group. It trades about 0.11 of its potential returns per unit of risk. Perla Group International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Perla Group International on October 12, 2024 and sell it today you would lose (0.01) from holding Perla Group International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Cemtrex Pref  vs.  Perla Group International

Cemtrex Pref

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Cemtrex Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cemtrex Pref is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Perla Group International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perla Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Perla Group is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cemtrex Pref and Perla Group

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

The idea behind Cemtrex Pref and Perla Group International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.