Correlation Between CHAR Technologies and EcoSynthetix

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

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

Diversification Opportunities for CHAR Technologies and EcoSynthetix

0.58

Correlation Coefficient

CHAR Technologies  EcoSynthetix

Very weak diversification

The 3 months correlation between CHAR and EcoSynthetix is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding CHAR Technologies and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix and CHAR Technologies 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 CHAR Technologies are associated (or correlated) with EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of CHAR Technologies i.e., CHAR Technologies and EcoSynthetix go up and down completely randomly.

Pair Corralation between CHAR Technologies and EcoSynthetix

Assuming the 90 days horizon CHAR Technologies is expected to generate 2.39 times more return on investment than EcoSynthetix. However, CHAR Technologies is 2.39 times more volatile than EcoSynthetix. It trades about 0.0 of its potential returns per unit of risk. EcoSynthetix is currently generating about 0.0 per unit of risk. If you would invest  22.00  in CHAR Technologies on October 7, 2024 and sell it today you would lose (1.00) from holding CHAR Technologies or give up 4.55% of portfolio value over 90 days.

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

CHAR Technologies  vs.  EcoSynthetix

CHAR Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHAR Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

EcoSynthetix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EcoSynthetix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 CHAR Technologies and EcoSynthetix

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

The idea behind CHAR Technologies and EcoSynthetix 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.