Correlation Between DIRTT Environmental and ACT Energy

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

By analyzing existing cross correlation between DIRTT Environmental Solutions and ACT Energy Technologies, you can compare the effects of market volatilities on DIRTT Environmental and ACT Energy 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 DIRTT Environmental with a short position of ACT Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIRTT Environmental and ACT Energy.

Diversification Opportunities for DIRTT Environmental and ACT Energy

-0.13

Correlation Coefficient

DIRTT Environmental  ACT Energy

Good diversification

The 3 months correlation between DIRTT and ACT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding DIRTT Environmental Solutions and ACT Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACT Energy Technologies and DIRTT 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 DIRTT Environmental Solutions are associated (or correlated) with ACT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACT Energy Technologies has no effect on the direction of DIRTT Environmental i.e., DIRTT Environmental and ACT Energy go up and down completely randomly.

Pair Corralation between DIRTT Environmental and ACT Energy

Assuming the 90 days trading horizon DIRTT Environmental Solutions is expected to under-perform the ACT Energy. In addition to that, DIRTT Environmental is 2.62 times more volatile than ACT Energy Technologies. It trades about -0.05 of its total potential returns per unit of risk. ACT Energy Technologies is currently generating about -0.06 per unit of volatility. If you would invest  501.00  in ACT Energy Technologies on May 5, 2025 and sell it today you would lose (33.00) from holding ACT Energy Technologies or give up 6.59% of portfolio value over 90 days.

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

DIRTT Environmental Solutions  vs.  ACT Energy Technologies

DIRTT Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIRTT Environmental Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ACT Energy Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with DIRTT Environmental and ACT Energy

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

The idea behind DIRTT Environmental Solutions and ACT Energy Technologies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.