Correlation Between Panaxia Labs and Retailors

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

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

Diversification Opportunities for Panaxia Labs and Retailors

-0.5

Correlation Coefficient

Panaxia Labs  Retailors

Very good diversification

The 3 months correlation between Panaxia and Retailors is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Panaxia Labs Israel and Retailors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailors and Panaxia Labs 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 Panaxia Labs Israel are associated (or correlated) with Retailors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailors has no effect on the direction of Panaxia Labs i.e., Panaxia Labs and Retailors go up and down completely randomly.

Pair Corralation between Panaxia Labs and Retailors

Assuming the 90 days trading horizon Panaxia Labs is expected to generate 1.15 times less return on investment than Retailors. In addition to that, Panaxia Labs is 1.64 times more volatile than Retailors. It trades about 0.06 of its total potential returns per unit of risk. Retailors is currently generating about 0.11 per unit of volatility. If you would invest  660,100  in Retailors on September 27, 2024 and sell it today you would earn a total of  79,800  from holding Retailors or generate 12.09% return on investment over 90 days.

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

Panaxia Labs Israel  vs.  Retailors

Panaxia Labs Israel

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Panaxia Labs Israel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Panaxia Labs sustained solid returns over the last few months and may actually be approaching a breakup point.

Retailors

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Retailors are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Retailors sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panaxia Labs and Retailors

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

The idea behind Panaxia Labs Israel and Retailors 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 Transaction History module to view history of all your transactions and understand their impact on performance.