Correlation Between CDT Environmental and Perma Fix

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

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

Diversification Opportunities for CDT Environmental and Perma Fix

-0.43

Correlation Coefficient

CDT Environmental  Perma Fix

Very good diversification

The 3 months correlation between CDT and Perma is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CDT Environmental Technology 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 CDT 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 CDT Environmental Technology 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 CDT Environmental i.e., CDT Environmental and Perma Fix go up and down completely randomly.

Pair Corralation between CDT Environmental and Perma Fix

Given the investment horizon of 90 days CDT Environmental Technology is expected to generate 3.57 times more return on investment than Perma Fix. However, CDT Environmental is 3.57 times more volatile than Perma Fix Environmental Svcs. It trades about 0.05 of its potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about 0.11 per unit of risk. If you would invest  70.00  in CDT Environmental Technology on May 3, 2025 and sell it today you would earn a total of  4.00  from holding CDT Environmental Technology or generate 5.71% return on investment over 90 days.

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

CDT Environmental Technology  vs.  Perma Fix Environmental Svcs

CDT Environmental

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CDT Environmental Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, CDT Environmental reported solid returns over the last few months and may actually be approaching a breakup point.

Perma Fix Environmental

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perma Fix Environmental Svcs are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Perma Fix demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CDT Environmental and Perma Fix

The main advantage of trading using opposite CDT Environmental and Perma Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDT Environmental 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 CDT Environmental Technology 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..