Correlation Between PyroGenesis Canada and Crane

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

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

Diversification Opportunities for PyroGenesis Canada and Crane

0.44

Correlation Coefficient

PyroGenesis Canada  Crane

Very weak diversification

The 3 months correlation between PyroGenesis and Crane is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PyroGenesis Canada and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and PyroGenesis Canada 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 PyroGenesis Canada are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of PyroGenesis Canada i.e., PyroGenesis Canada and Crane go up and down completely randomly.

Pair Corralation between PyroGenesis Canada and Crane

Considering the 90-day investment horizon PyroGenesis Canada is expected to generate 4.31 times less return on investment than Crane. In addition to that, PyroGenesis Canada is 2.54 times more volatile than Crane Company. It trades about 0.0 of its total potential returns per unit of risk. Crane Company is currently generating about 0.04 per unit of volatility. If you would invest  10,779  in Crane Company on October 11, 2024 and sell it today you would earn a total of  4,587  from holding Crane Company or generate 42.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	25.86%
Values	Daily Returns

PyroGenesis Canada  vs.  Crane Company

PyroGenesis Canada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PyroGenesis Canada has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, PyroGenesis Canada is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Crane Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crane Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crane is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PyroGenesis Canada and Crane

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

The idea behind PyroGenesis Canada and Crane Company 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.