Correlation Between PureCycle Technologies and Alphamin Resources

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

By analyzing existing cross correlation between PureCycle Technologies and Alphamin Resources Corp, you can compare the effects of market volatilities on PureCycle Technologies and Alphamin Resources 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 Alphamin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and Alphamin Resources.

Diversification Opportunities for PureCycle Technologies and Alphamin Resources

0.84

Correlation Coefficient

PureCycle Technologies  Alphamin Resources

Very poor diversification

The 3 months correlation between PureCycle and Alphamin is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Alphamin Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphamin Resources Corp 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 Alphamin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphamin Resources Corp has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Alphamin Resources go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Alphamin Resources

Assuming the 90 days horizon PureCycle Technologies is expected to generate 1.24 times more return on investment than Alphamin Resources. However, PureCycle Technologies is 1.24 times more volatile than Alphamin Resources Corp. It trades about -0.1 of its potential returns per unit of risk. Alphamin Resources Corp is currently generating about -0.14 per unit of risk. If you would invest  347.00  in PureCycle Technologies on December 30, 2024 and sell it today you would lose (186.00) from holding PureCycle Technologies or give up 53.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

PureCycle Technologies  vs.  Alphamin Resources Corp

PureCycle Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days PureCycle Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Alphamin Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphamin Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PureCycle Technologies and Alphamin Resources

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

The idea behind PureCycle Technologies and Alphamin Resources 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.