Correlation Between Picton Mahoney and EcoSynthetix

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

By analyzing existing cross correlation between Picton Mahoney Fortified and EcoSynthetix, you can compare the effects of market volatilities on Picton Mahoney and EcoSynthetix 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 Picton Mahoney with a short position of EcoSynthetix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and EcoSynthetix.

Diversification Opportunities for Picton Mahoney and EcoSynthetix

-0.01

Correlation Coefficient

Picton Mahoney  EcoSynthetix

Good diversification

The 3 months correlation between Picton and EcoSynthetix is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and EcoSynthetix go up and down completely randomly.

Pair Corralation between Picton Mahoney and EcoSynthetix

Assuming the 90 days trading horizon Picton Mahoney Fortified is expected to generate 0.13 times more return on investment than EcoSynthetix. However, Picton Mahoney Fortified is 7.63 times less risky than EcoSynthetix. It trades about 0.1 of its potential returns per unit of risk. EcoSynthetix is currently generating about -0.06 per unit of risk. If you would invest  999.00  in Picton Mahoney Fortified on October 21, 2024 and sell it today you would earn a total of  5.00  from holding Picton Mahoney Fortified or generate 0.5% return on investment over 90 days.

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

Picton Mahoney Fortified  vs.  EcoSynthetix

Picton Mahoney Fortified

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Picton Mahoney Fortified are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Picton Mahoney is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

EcoSynthetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EcoSynthetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EcoSynthetix is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Picton Mahoney and EcoSynthetix

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

The idea behind Picton Mahoney Fortified and EcoSynthetix 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.