Correlation Between Perma-Fix Environmental and Nutrien

Can any of the company-specific risk be diversified away by investing in both Perma-Fix Environmental and Nutrien 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 Nutrien 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 Nutrien, you can compare the effects of market volatilities on Perma-Fix Environmental and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perma-Fix Environmental and Nutrien.

Diversification Opportunities for Perma-Fix Environmental and Nutrien

-0.21

Correlation Coefficient

Perma-Fix Environmental  Nutrien

Very good diversification

The 3 months correlation between Perma-Fix and Nutrien is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Perma-Fix Environmental i.e., Perma-Fix Environmental and Nutrien go up and down completely randomly.

Pair Corralation between Perma-Fix Environmental and Nutrien

Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to under-perform the Nutrien. In addition to that, Perma-Fix Environmental is 1.82 times more volatile than Nutrien. It trades about -0.39 of its total potential returns per unit of risk. Nutrien is currently generating about 0.04 per unit of volatility. If you would invest  4,965  in Nutrien on December 4, 2024 and sell it today you would earn a total of  61.00  from holding Nutrien or generate 1.23% return on investment over 90 days.

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

Perma Fix Environmental Servic  vs.  Nutrien

Perma Fix Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perma Fix Environmental Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nutrien

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nutrien may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Perma-Fix Environmental and Nutrien

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

The idea behind Perma Fix Environmental Services and Nutrien 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..