Correlation Between PureCycle Technologies and American Creek
Can any of the company-specific risk be diversified away by investing in both PureCycle Technologies and American Creek 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 PureCycle Technologies and American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PureCycle Technologies and American Creek Resources, you can compare the effects of market volatilities on PureCycle Technologies and American Creek 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 PureCycle Technologies with a short position of American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and American Creek.
Diversification Opportunities for PureCycle Technologies and American Creek
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PureCycle and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources and PureCycle Technologies 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 PureCycle Technologies are associated (or correlated) with American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and American Creek go up and down completely randomly.
Pair Corralation between PureCycle Technologies and American Creek
Assuming the 90 days horizon PureCycle Technologies is expected to generate 1.09 times more return on investment than American Creek. However, PureCycle Technologies is 1.09 times more volatile than American Creek Resources. It trades about -0.08 of its potential returns per unit of risk. American Creek Resources is currently generating about -0.21 per unit of risk. If you would invest 467.00 in PureCycle Technologies on December 4, 2024 and sell it today you would lose (197.00) from holding PureCycle Technologies or give up 42.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
PureCycle Technologies vs. American Creek Resources
Performance |
Timeline |
PureCycle Technologies |
American Creek Resources |
PureCycle Technologies and American Creek Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PureCycle Technologies and American Creek
The main advantage of trading using opposite PureCycle Technologies and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureCycle Technologies position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.PureCycle Technologies vs. Origin Materials Warrant | PureCycle Technologies vs. Purecycle Technologies Holdings | PureCycle Technologies vs. Blade Air Mobility |
American Creek vs. Gold79 Mines | American Creek vs. Arctic Star Exploration | American Creek vs. American Clean Resources | American Creek vs. Arras Minerals Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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