Correlation Between Parx Plastics and Crossject
Can any of the company-specific risk be diversified away by investing in both Parx Plastics and Crossject 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 Parx Plastics and Crossject into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parx Plastics NV and Crossject, you can compare the effects of market volatilities on Parx Plastics and Crossject 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 Parx Plastics with a short position of Crossject. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parx Plastics and Crossject.
Diversification Opportunities for Parx Plastics and Crossject
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Parx and Crossject is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Parx Plastics NV and Crossject in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossject and Parx Plastics 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 Parx Plastics NV are associated (or correlated) with Crossject. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossject has no effect on the direction of Parx Plastics i.e., Parx Plastics and Crossject go up and down completely randomly.
Pair Corralation between Parx Plastics and Crossject
Assuming the 90 days trading horizon Parx Plastics NV is expected to generate 1.61 times more return on investment than Crossject. However, Parx Plastics is 1.61 times more volatile than Crossject. It trades about 0.01 of its potential returns per unit of risk. Crossject is currently generating about -0.05 per unit of risk. If you would invest 48.00 in Parx Plastics NV on September 24, 2024 and sell it today you would lose (18.00) from holding Parx Plastics NV or give up 37.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Parx Plastics NV vs. Crossject
Performance |
Timeline |
Parx Plastics NV |
Crossject |
Parx Plastics and Crossject Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Parx Plastics and Crossject
The main advantage of trading using opposite Parx Plastics and Crossject positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parx Plastics position performs unexpectedly, Crossject 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 Crossject will offset losses from the drop in Crossject's long position.Parx Plastics vs. Biosynex | Parx Plastics vs. Eurobio Scientific SA | Parx Plastics vs. Novacyt | Parx Plastics vs. Intrasense |
Crossject vs. Kalray SA | Crossject vs. Biosynex | Crossject vs. Eurobio Scientific SA | Crossject vs. OSE Pharma SA |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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