Correlation Between Wilhelmina and Perma Fix

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

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

Diversification Opportunities for Wilhelmina and Perma Fix

-0.89

Correlation Coefficient

Wilhelmina  Perma Fix

Pay attention - limited upside

The 3 months correlation between Wilhelmina and Perma is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and Perma Fix Environmental Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and Wilhelmina 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 Wilhelmina are associated (or correlated) with Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of Wilhelmina i.e., Wilhelmina and Perma Fix go up and down completely randomly.

Pair Corralation between Wilhelmina and Perma Fix

Given the investment horizon of 90 days Wilhelmina is expected to under-perform the Perma Fix. In addition to that, Wilhelmina is 1.44 times more volatile than Perma Fix Environmental Svcs. It trades about -0.07 of its total potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about 0.17 per unit of volatility. If you would invest  999.00  in Perma Fix Environmental Svcs on September 1, 2024 and sell it today you would earn a total of  429.00  from holding Perma Fix Environmental Svcs or generate 42.94% return on investment over 90 days.

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

Wilhelmina  vs.  Perma Fix Environmental Svcs

Wilhelmina

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilhelmina has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Perma Fix Environmental

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perma Fix Environmental Svcs are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Perma Fix demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wilhelmina and Perma Fix

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

The idea behind Wilhelmina and Perma Fix Environmental Svcs 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.