Correlation Between Perimeter Solutions and Cleantech Biofuels

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

By analyzing existing cross correlation between Perimeter Solutions SA and Cleantech Biofuels, you can compare the effects of market volatilities on Perimeter Solutions and Cleantech Biofuels 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 Perimeter Solutions with a short position of Cleantech Biofuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Solutions and Cleantech Biofuels.

Diversification Opportunities for Perimeter Solutions and Cleantech Biofuels

0.0

Correlation Coefficient

Perimeter Solutions  Cleantech Biofuels

Pay attention - limited upside

The 3 months correlation between Perimeter and Cleantech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Cleantech Biofuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleantech Biofuels and Perimeter Solutions 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 Perimeter Solutions SA are associated (or correlated) with Cleantech Biofuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleantech Biofuels has no effect on the direction of Perimeter Solutions i.e., Perimeter Solutions and Cleantech Biofuels go up and down completely randomly.

Pair Corralation between Perimeter Solutions and Cleantech Biofuels

If you would invest  403.00  in Perimeter Solutions SA on September 4, 2024 and sell it today you would earn a total of  886.00  from holding Perimeter Solutions SA or generate 219.85% return on investment over 90 days.

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

Perimeter Solutions SA  vs.  Cleantech Biofuels

Perimeter Solutions

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Solutions SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Perimeter Solutions displayed solid returns over the last few months and may actually be approaching a breakup point.

Cleantech Biofuels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleantech Biofuels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Cleantech Biofuels is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Perimeter Solutions and Cleantech Biofuels

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

The idea behind Perimeter Solutions SA and Cleantech Biofuels 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.