Correlation Between Creative Realities and PAR Technology

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

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

Diversification Opportunities for Creative Realities and PAR Technology

-0.86

Correlation Coefficient

Creative Realities  PAR Technology

Pay attention - limited upside

The 3 months correlation between Creative and PAR is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Creative Realities and PAR Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAR Technology and Creative Realities 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 Creative Realities are associated (or correlated) with PAR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAR Technology has no effect on the direction of Creative Realities i.e., Creative Realities and PAR Technology go up and down completely randomly.

Pair Corralation between Creative Realities and PAR Technology

Given the investment horizon of 90 days Creative Realities is expected to generate 1.18 times less return on investment than PAR Technology. In addition to that, Creative Realities is 1.69 times more volatile than PAR Technology. It trades about 0.04 of its total potential returns per unit of risk. PAR Technology is currently generating about 0.09 per unit of volatility. If you would invest  2,630  in PAR Technology on September 28, 2024 and sell it today you would earn a total of  4,698  from holding PAR Technology or generate 178.63% return on investment over 90 days.

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

Creative Realities  vs.  PAR Technology

Creative Realities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Realities 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PAR Technology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, PAR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Creative Realities and PAR Technology

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

The idea behind Creative Realities and PAR Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.