Correlation Between Pinetree Capital and Paladin Energy

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

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

Diversification Opportunities for Pinetree Capital and Paladin Energy

-0.83

Correlation Coefficient

Pinetree Capital  Paladin Energy

Pay attention - limited upside

The 3 months correlation between Pinetree and Paladin is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pinetree Capital and Paladin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paladin Energy and Pinetree Capital 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 Pinetree Capital are associated (or correlated) with Paladin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paladin Energy has no effect on the direction of Pinetree Capital i.e., Pinetree Capital and Paladin Energy go up and down completely randomly.

Pair Corralation between Pinetree Capital and Paladin Energy

Assuming the 90 days horizon Pinetree Capital is expected to under-perform the Paladin Energy. In addition to that, Pinetree Capital is 1.34 times more volatile than Paladin Energy. It trades about -0.01 of its total potential returns per unit of risk. Paladin Energy is currently generating about 0.03 per unit of volatility. If you would invest  516.00  in Paladin Energy on October 17, 2024 and sell it today you would earn a total of  9.00  from holding Paladin Energy or generate 1.74% return on investment over 90 days.

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

Pinetree Capital  vs.  Paladin Energy

Pinetree Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pinetree Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Pinetree Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Paladin Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paladin Energy 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 Pinetree Capital and Paladin Energy

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

The idea behind Pinetree Capital and Paladin Energy 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .