Correlation Between Carbon Streaming and Patria Investments

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

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

Diversification Opportunities for Carbon Streaming and Patria Investments

-0.4

Correlation Coefficient

Carbon Streaming  Patria Investments

Very good diversification

The 3 months correlation between Carbon and Patria is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp and Patria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Investments and Carbon Streaming 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 Carbon Streaming Corp are associated (or correlated) with Patria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Investments has no effect on the direction of Carbon Streaming i.e., Carbon Streaming and Patria Investments go up and down completely randomly.

Pair Corralation between Carbon Streaming and Patria Investments

Assuming the 90 days horizon Carbon Streaming Corp is expected to under-perform the Patria Investments. In addition to that, Carbon Streaming is 2.51 times more volatile than Patria Investments. It trades about -0.03 of its total potential returns per unit of risk. Patria Investments is currently generating about 0.05 per unit of volatility. If you would invest  1,093  in Patria Investments on October 7, 2024 and sell it today you would earn a total of  50.00  from holding Patria Investments or generate 4.57% return on investment over 90 days.

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

Carbon Streaming Corp  vs.  Patria Investments

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carbon Streaming Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Patria Investments

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Patria Investments is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carbon Streaming and Patria Investments

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

The idea behind Carbon Streaming Corp and Patria Investments 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.