Correlation Between Deveron Corp and Paragon Technologies

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

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

Diversification Opportunities for Deveron Corp and Paragon Technologies

0.52

Correlation Coefficient

Deveron Corp  Paragon Technologies

Very weak diversification

The 3 months correlation between Deveron and Paragon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Deveron Corp and Paragon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Technologies and Deveron Corp 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 Deveron Corp are associated (or correlated) with Paragon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Technologies has no effect on the direction of Deveron Corp i.e., Deveron Corp and Paragon Technologies go up and down completely randomly.

Pair Corralation between Deveron Corp and Paragon Technologies

Assuming the 90 days horizon Deveron Corp is expected to generate 0.31 times more return on investment than Paragon Technologies. However, Deveron Corp is 3.24 times less risky than Paragon Technologies. It trades about 0.13 of its potential returns per unit of risk. Paragon Technologies is currently generating about 0.02 per unit of risk. If you would invest  0.08  in Deveron Corp on December 21, 2024 and sell it today you would earn a total of  0.01  from holding Deveron Corp or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

Deveron Corp  vs.  Paragon Technologies

Deveron Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deveron Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Deveron Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Paragon Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Paragon Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Paragon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Deveron Corp and Paragon Technologies

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

The idea behind Deveron Corp and Paragon 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.