Correlation Between PureCycle Technologies and Gold Reserve

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

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

Diversification Opportunities for PureCycle Technologies and Gold Reserve

-0.06

Correlation Coefficient

PureCycle Technologies  Gold Reserve

Good diversification

The 3 months correlation between PureCycle and Gold is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Gold Reserve go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Gold Reserve

Assuming the 90 days horizon PureCycle Technologies is expected to under-perform the Gold Reserve. In addition to that, PureCycle Technologies is 1.52 times more volatile than Gold Reserve. It trades about -0.07 of its total potential returns per unit of risk. Gold Reserve is currently generating about 0.09 per unit of volatility. If you would invest  148.00  in Gold Reserve on December 1, 2024 and sell it today you would earn a total of  32.00  from holding Gold Reserve or generate 21.62% return on investment over 90 days.

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

PureCycle Technologies  vs.  Gold Reserve

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.

Gold Reserve

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Reserve are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Reserve reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureCycle Technologies and Gold Reserve

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

The idea behind PureCycle Technologies and Gold Reserve 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.