Correlation Between Photomyne and Airtouch Solar

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

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

Diversification Opportunities for Photomyne and Airtouch Solar

0.0

Correlation Coefficient

Photomyne  Airtouch Solar

Pay attention - limited upside

The 3 months correlation between Photomyne and Airtouch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Airtouch Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airtouch Solar and Photomyne 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 Photomyne are associated (or correlated) with Airtouch Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airtouch Solar has no effect on the direction of Photomyne i.e., Photomyne and Airtouch Solar go up and down completely randomly.

Pair Corralation between Photomyne and Airtouch Solar

If you would invest  239,900  in Photomyne on September 12, 2024 and sell it today you would earn a total of  52,900  from holding Photomyne or generate 22.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Photomyne  vs.  Airtouch Solar

Photomyne

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Photomyne are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Photomyne sustained solid returns over the last few months and may actually be approaching a breakup point.

Airtouch Solar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Airtouch Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Airtouch Solar is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Photomyne and Airtouch Solar

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

The idea behind Photomyne and Airtouch Solar 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 Stocks Directory module to find actively traded stocks across global markets.