Correlation Between Waste Plastic and Proximar Seafood

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

By analyzing existing cross correlation between Waste Plastic Upcycling and Proximar Seafood AS, you can compare the effects of market volatilities on Waste Plastic and Proximar Seafood 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 Waste Plastic with a short position of Proximar Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Plastic and Proximar Seafood.

Diversification Opportunities for Waste Plastic and Proximar Seafood

0.52

Correlation Coefficient

Waste Plastic  Proximar Seafood

Very weak diversification

The 3 months correlation between Waste and Proximar is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Waste Plastic Upcycling and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar Seafood and Waste Plastic 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 Waste Plastic Upcycling are associated (or correlated) with Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Waste Plastic i.e., Waste Plastic and Proximar Seafood go up and down completely randomly.

Pair Corralation between Waste Plastic and Proximar Seafood

Assuming the 90 days trading horizon Waste Plastic Upcycling is expected to under-perform the Proximar Seafood. In addition to that, Waste Plastic is 1.61 times more volatile than Proximar Seafood AS. It trades about -0.2 of its total potential returns per unit of risk. Proximar Seafood AS is currently generating about -0.07 per unit of volatility. If you would invest  392.00  in Proximar Seafood AS on September 2, 2024 and sell it today you would lose (47.00) from holding Proximar Seafood AS or give up 11.99% of portfolio value over 90 days.

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

Waste Plastic Upcycling  vs.  Proximar Seafood AS

Waste Plastic Upcycling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Plastic Upcycling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Proximar Seafood

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proximar Seafood AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Waste Plastic and Proximar Seafood

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

The idea behind Waste Plastic Upcycling and Proximar Seafood AS 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.