Correlation Between CardieX and Pure Cycle

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

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

Diversification Opportunities for CardieX and Pure Cycle

0.0

Correlation Coefficient

CardieX  Pure Cycle

Pay attention - limited upside

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

Pair Corralation between CardieX and Pure Cycle

If you would invest  954.00  in Pure Cycle on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Pure Cycle or generate 0.0% return on investment over 90 days.

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

CardieX Limited  vs.  Pure Cycle

CardieX Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CardieX Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, CardieX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pure Cycle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pure Cycle has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pure Cycle is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CardieX and Pure Cycle

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

The idea behind CardieX Limited and Pure Cycle 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.