Correlation Between Susglobal Energy and Perma Fix

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

By analyzing existing cross correlation between Susglobal Energy Corp and Perma Fix Environmental Svcs, you can compare the effects of market volatilities on Susglobal Energy and Perma Fix 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 Susglobal Energy with a short position of Perma Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Susglobal Energy and Perma Fix.

Diversification Opportunities for Susglobal Energy and Perma Fix

0.2

Correlation Coefficient

Susglobal Energy  Perma Fix

Modest diversification

The 3 months correlation between Susglobal and Perma is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Susglobal Energy Corp and Perma Fix Environmental Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and Susglobal Energy 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 Susglobal Energy Corp are associated (or correlated) with Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of Susglobal Energy i.e., Susglobal Energy and Perma Fix go up and down completely randomly.

Pair Corralation between Susglobal Energy and Perma Fix

Given the investment horizon of 90 days Susglobal Energy Corp is expected to generate 2.92 times more return on investment than Perma Fix. However, Susglobal Energy is 2.92 times more volatile than Perma Fix Environmental Svcs. It trades about 0.03 of its potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about 0.07 per unit of risk. If you would invest  14.00  in Susglobal Energy Corp on September 21, 2024 and sell it today you would lose (12.15) from holding Susglobal Energy Corp or give up 86.79% of portfolio value over 90 days.

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

Susglobal Energy Corp  vs.  Perma Fix Environmental Svcs

Susglobal Energy Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Susglobal Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Susglobal Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Susglobal Energy and Perma Fix

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

The idea behind Susglobal Energy Corp and Perma Fix Environmental Svcs 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.