Correlation Between DIRTT Environmental and Guru Organic

Can any of the company-specific risk be diversified away by investing in both DIRTT Environmental and Guru Organic 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 Guru Organic 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 Guru Organic Energy, you can compare the effects of market volatilities on DIRTT Environmental and Guru Organic 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 Guru Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIRTT Environmental and Guru Organic.

Diversification Opportunities for DIRTT Environmental and Guru Organic

-0.39

Correlation Coefficient

DIRTT Environmental  Guru Organic

Very good diversification

The 3 months correlation between DIRTT and Guru is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DIRTT Environmental Solutions and Guru Organic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guru Organic Energy 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 Guru Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guru Organic Energy has no effect on the direction of DIRTT Environmental i.e., DIRTT Environmental and Guru Organic go up and down completely randomly.

Pair Corralation between DIRTT Environmental and Guru Organic

Assuming the 90 days trading horizon DIRTT Environmental Solutions is expected to under-perform the Guru Organic. In addition to that, DIRTT Environmental is 1.27 times more volatile than Guru Organic Energy. It trades about -0.02 of its total potential returns per unit of risk. Guru Organic Energy is currently generating about 0.08 per unit of volatility. If you would invest  169.00  in Guru Organic Energy on April 23, 2025 and sell it today you would earn a total of  26.00  from holding Guru Organic Energy or generate 15.38% return on investment over 90 days.

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

DIRTT Environmental Solutions  vs.  Guru Organic Energy

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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Guru Organic Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guru Organic Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guru Organic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DIRTT Environmental and Guru Organic

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

The idea behind DIRTT Environmental Solutions and Guru Organic Energy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.