Correlation Between Perma-Fix Environmental and Byggmax Group

Can any of the company-specific risk be diversified away by investing in both Perma-Fix Environmental and Byggmax Group 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 Perma-Fix Environmental and Byggmax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perma Fix Environmental Services and Byggmax Group AB, you can compare the effects of market volatilities on Perma-Fix Environmental and Byggmax Group 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 Perma-Fix Environmental with a short position of Byggmax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma-Fix Environmental and Byggmax Group.

Diversification Opportunities for Perma-Fix Environmental and Byggmax Group

-0.2

Correlation Coefficient

Perma-Fix Environmental  Byggmax Group

Good diversification

The 3 months correlation between Perma-Fix and Byggmax is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and Byggmax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byggmax Group AB and Perma-Fix Environmental 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 Perma Fix Environmental Services are associated (or correlated) with Byggmax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byggmax Group AB has no effect on the direction of Perma-Fix Environmental i.e., Perma-Fix Environmental and Byggmax Group go up and down completely randomly.

Pair Corralation between Perma-Fix Environmental and Byggmax Group

Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to generate 1.41 times more return on investment than Byggmax Group. However, Perma-Fix Environmental is 1.41 times more volatile than Byggmax Group AB. It trades about 0.06 of its potential returns per unit of risk. Byggmax Group AB is currently generating about 0.06 per unit of risk. If you would invest  995.00  in Perma Fix Environmental Services on September 15, 2024 and sell it today you would earn a total of  105.00  from holding Perma Fix Environmental Services or generate 10.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Perma Fix Environmental Servic  vs.  Byggmax Group AB

Perma Fix Environmental

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perma Fix Environmental Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Perma-Fix Environmental unveiled solid returns over the last few months and may actually be approaching a breakup point.

Byggmax Group AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Byggmax Group AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Byggmax Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Perma-Fix Environmental and Byggmax Group

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

The idea behind Perma Fix Environmental Services and Byggmax Group AB 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.