Correlation Between Dye Durham and Anaergia

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

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

Diversification Opportunities for Dye Durham and Anaergia

-0.5

Correlation Coefficient

Dye Durham  Anaergia

Very good diversification

The 3 months correlation between Dye and Anaergia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dye Durham and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia and Dye Durham 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 Dye Durham are associated (or correlated) with Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of Dye Durham i.e., Dye Durham and Anaergia go up and down completely randomly.

Pair Corralation between Dye Durham and Anaergia

Assuming the 90 days trading horizon Dye Durham is expected to under-perform the Anaergia. But the stock apears to be less risky and, when comparing its historical volatility, Dye Durham is 2.99 times less risky than Anaergia. The stock trades about -0.29 of its potential returns per unit of risk. The Anaergia is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Anaergia on October 25, 2024 and sell it today you would earn a total of  24.00  from holding Anaergia or generate 27.59% return on investment over 90 days.

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

Dye Durham  vs.  Anaergia

Dye Durham

Risk-Adjusted Performance

0 of 100

Very Weak

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

Anaergia

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anaergia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Anaergia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dye Durham and Anaergia

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

The idea behind Dye Durham and Anaergia 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.