Correlation Between Perma-Fix Environmental and AAC TECHNOLOGHLDGADR

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

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

Diversification Opportunities for Perma-Fix Environmental and AAC TECHNOLOGHLDGADR

-0.12

Correlation Coefficient

Perma-Fix Environmental  AAC TECHNOLOGHLDGADR

Good diversification

The 3 months correlation between Perma-Fix and AAC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Perma Fix Environmental Servic and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR and Perma-Fix Environmental 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 Perma Fix Environmental Services are associated (or correlated) with AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Perma-Fix Environmental i.e., Perma-Fix Environmental and AAC TECHNOLOGHLDGADR go up and down completely randomly.

Pair Corralation between Perma-Fix Environmental and AAC TECHNOLOGHLDGADR

Assuming the 90 days trading horizon Perma Fix Environmental Services is expected to under-perform the AAC TECHNOLOGHLDGADR. In addition to that, Perma-Fix Environmental is 1.42 times more volatile than AAC TECHNOLOGHLDGADR. It trades about -0.11 of its total potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.16 per unit of volatility. If you would invest  366.00  in AAC TECHNOLOGHLDGADR on September 23, 2024 and sell it today you would earn a total of  84.00  from holding AAC TECHNOLOGHLDGADR or generate 22.95% return on investment over 90 days.

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

Perma Fix Environmental Servic  vs.  AAC TECHNOLOGHLDGADR

Perma Fix Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perma Fix Environmental Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Perma-Fix Environmental is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AAC TECHNOLOGHLDGADR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AAC TECHNOLOGHLDGADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AAC TECHNOLOGHLDGADR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perma-Fix Environmental and AAC TECHNOLOGHLDGADR

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

The idea behind Perma Fix Environmental Services and AAC TECHNOLOGHLDGADR 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.