Correlation Between PureCycle Technologies and Spanish Mountain

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

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

Diversification Opportunities for PureCycle Technologies and Spanish Mountain

0.62

Correlation Coefficient

PureCycle Technologies  Spanish Mountain

Poor diversification

The 3 months correlation between PureCycle and Spanish is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold 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 Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Spanish Mountain go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Spanish Mountain

Assuming the 90 days horizon PureCycle Technologies is expected to generate 7.93 times more return on investment than Spanish Mountain. However, PureCycle Technologies is 7.93 times more volatile than Spanish Mountain Gold. It trades about 0.05 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about 0.0 per unit of risk. If you would invest  335.00  in PureCycle Technologies on October 23, 2024 and sell it today you would lose (25.00) from holding PureCycle Technologies or give up 7.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.17%
Values	Daily Returns

PureCycle Technologies  vs.  Spanish Mountain Gold

PureCycle Technologies

Risk-Adjusted Performance

0 of 100

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 fairly stable basic indicators, PureCycle Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Spanish Mountain Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spanish Mountain Gold 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PureCycle Technologies and Spanish Mountain

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

The idea behind PureCycle Technologies and Spanish Mountain Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.