Correlation Between Crown Electrokinetics and REX American

Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and REX American 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 REX American 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 REX American Resources, you can compare the effects of market volatilities on Crown Electrokinetics and REX American 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 REX American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and REX American.

Diversification Opportunities for Crown Electrokinetics and REX American

-0.12

Correlation Coefficient

Crown Electrokinetics  REX American

Good diversification

The 3 months correlation between Crown and REX is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and REX American Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX American Resources 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 REX American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX American Resources has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and REX American go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and REX American

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the REX American. In addition to that, Crown Electrokinetics is 7.08 times more volatile than REX American Resources. It trades about -0.03 of its total potential returns per unit of risk. REX American Resources is currently generating about 0.04 per unit of volatility. If you would invest  3,018  in REX American Resources on September 2, 2024 and sell it today you would earn a total of  1,313  from holding REX American Resources or generate 43.51% return on investment over 90 days.

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

Crown Electrokinetics Corp  vs.  REX American Resources

Crown Electrokinetics

Risk-Adjusted Performance

0 of 100

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

REX American Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REX American Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, REX American is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Crown Electrokinetics and REX American

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

The idea behind Crown Electrokinetics Corp and REX American 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.