Correlation Between Perimeter Solutions and Haydale Graphene

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

By analyzing existing cross correlation between Perimeter Solutions SA and Haydale Graphene Industries, you can compare the effects of market volatilities on Perimeter Solutions and Haydale Graphene 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 Perimeter Solutions with a short position of Haydale Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Solutions and Haydale Graphene.

Diversification Opportunities for Perimeter Solutions and Haydale Graphene

-0.27

Correlation Coefficient

Perimeter Solutions  Haydale Graphene

Very good diversification

The 3 months correlation between Perimeter and Haydale is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Haydale Graphene Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haydale Graphene Ind and Perimeter Solutions 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 Perimeter Solutions SA are associated (or correlated) with Haydale Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haydale Graphene Ind has no effect on the direction of Perimeter Solutions i.e., Perimeter Solutions and Haydale Graphene go up and down completely randomly.

Pair Corralation between Perimeter Solutions and Haydale Graphene

Considering the 90-day investment horizon Perimeter Solutions is expected to generate 7.23 times less return on investment than Haydale Graphene. But when comparing it to its historical volatility, Perimeter Solutions SA is 9.65 times less risky than Haydale Graphene. It trades about 0.11 of its potential returns per unit of risk. Haydale Graphene Industries is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.39  in Haydale Graphene Industries on September 5, 2024 and sell it today you would lose (0.13) from holding Haydale Graphene Industries or give up 33.33% of portfolio value over 90 days.

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

Perimeter Solutions SA  vs.  Haydale Graphene Industries

Perimeter Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Solutions SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Perimeter Solutions displayed solid returns over the last few months and may actually be approaching a breakup point.

Haydale Graphene Ind

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haydale Graphene Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Haydale Graphene reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perimeter Solutions and Haydale Graphene

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

The idea behind Perimeter Solutions SA and Haydale Graphene Industries 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..