Correlation Between Patria Investments and Carbon Streaming

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

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

Diversification Opportunities for Patria Investments and Carbon Streaming

-0.4

Correlation Coefficient

Patria Investments  Carbon Streaming

Very good diversification

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

Pair Corralation between Patria Investments and Carbon Streaming

Considering the 90-day investment horizon Patria Investments is expected to generate 0.37 times more return on investment than Carbon Streaming. However, Patria Investments is 2.71 times less risky than Carbon Streaming. It trades about -0.01 of its potential returns per unit of risk. Carbon Streaming Corp is currently generating about -0.05 per unit of risk. If you would invest  1,226  in Patria Investments on October 22, 2024 and sell it today you would lose (61.00) from holding Patria Investments or give up 4.98% of portfolio value over 90 days.

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

Patria Investments  vs.  Carbon Streaming Corp

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 inconsistent basic indicators, Patria Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Carbon Streaming Corp

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Streaming Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carbon Streaming reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Patria Investments and Carbon Streaming

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

The idea behind Patria Investments and Carbon Streaming Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.