Correlation Between Crown Electrokinetics and Minerals Technologies

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

By analyzing existing cross correlation between Crown Electrokinetics Corp and Minerals Technologies, you can compare the effects of market volatilities on Crown Electrokinetics and Minerals Technologies 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 Crown Electrokinetics with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Minerals Technologies.

Diversification Opportunities for Crown Electrokinetics and Minerals Technologies

0.78

Correlation Coefficient

Crown Electrokinetics  Minerals Technologies

Poor diversification

The 3 months correlation between Crown and Minerals is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Minerals Technologies go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and Minerals Technologies

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Minerals Technologies. In addition to that, Crown Electrokinetics is 9.49 times more volatile than Minerals Technologies. It trades about -0.26 of its total potential returns per unit of risk. Minerals Technologies is currently generating about -0.21 per unit of volatility. If you would invest  7,591  in Minerals Technologies on December 28, 2024 and sell it today you would lose (1,230) from holding Minerals Technologies or give up 16.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	75.41%
Values	Daily Returns

Crown Electrokinetics Corp  vs.  Minerals Technologies

Crown Electrokinetics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Electrokinetics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Minerals Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minerals Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Crown Electrokinetics and Minerals Technologies

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

The idea behind Crown Electrokinetics Corp and Minerals Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.