Correlation Between Petros Pharmaceuticals and Energy Focu

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

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

Diversification Opportunities for Petros Pharmaceuticals and Energy Focu

-0.73

Correlation Coefficient

Petros Pharmaceuticals  Energy Focu

Pay attention - limited upside

The 3 months correlation between Petros and Energy is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Petros Pharmaceuticals and Energy Focu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Focu and Petros Pharmaceuticals 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 Petros Pharmaceuticals are associated (or correlated) with Energy Focu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Focu has no effect on the direction of Petros Pharmaceuticals i.e., Petros Pharmaceuticals and Energy Focu go up and down completely randomly.

Pair Corralation between Petros Pharmaceuticals and Energy Focu

Given the investment horizon of 90 days Petros Pharmaceuticals is expected to under-perform the Energy Focu. But the stock apears to be less risky and, when comparing its historical volatility, Petros Pharmaceuticals is 1.62 times less risky than Energy Focu. The stock trades about -0.21 of its potential returns per unit of risk. The Energy Focu is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Energy Focu on November 30, 2024 and sell it today you would earn a total of  98.00  from holding Energy Focu or generate 80.99% return on investment over 90 days.

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

Petros Pharmaceuticals  vs.  Energy Focu

Petros Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Petros Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Energy Focu

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Focu are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Energy Focu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Petros Pharmaceuticals and Energy Focu

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

The idea behind Petros Pharmaceuticals and Energy Focu 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.