Correlation Between PureCycle Technologies and Reservoir Media

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

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

Diversification Opportunities for PureCycle Technologies and Reservoir Media

-0.24

Correlation Coefficient

PureCycle Technologies  Reservoir Media

Very good diversification

The 3 months correlation between PureCycle and Reservoir is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Reservoir Media Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media Mana 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media Mana has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Reservoir Media go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Reservoir Media

Assuming the 90 days horizon PureCycle Technologies is expected to under-perform the Reservoir Media. But the stock apears to be less risky and, when comparing its historical volatility, PureCycle Technologies is 1.54 times less risky than Reservoir Media. The stock trades about -0.1 of its potential returns per unit of risk. The Reservoir Media Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Reservoir Media Management on December 31, 2024 and sell it today you would lose (21.00) from holding Reservoir Media Management or give up 14.48% of portfolio value over 90 days.

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

PureCycle Technologies  vs.  Reservoir Media Management

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 May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Reservoir Media Mana

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Reservoir Media showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PureCycle Technologies and Reservoir Media

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

The idea behind PureCycle Technologies and Reservoir Media Management 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.