Correlation Between High Arctic and Pason Systems

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

By analyzing existing cross correlation between High Arctic Energy and Pason Systems, you can compare the effects of market volatilities on High Arctic and Pason Systems 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 High Arctic with a short position of Pason Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Arctic and Pason Systems.

Diversification Opportunities for High Arctic and Pason Systems

0.33

Correlation Coefficient

High Arctic  Pason Systems

Weak diversification

The 3 months correlation between High and Pason is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding High Arctic Energy and Pason Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pason Systems and High Arctic 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 High Arctic Energy are associated (or correlated) with Pason Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pason Systems has no effect on the direction of High Arctic i.e., High Arctic and Pason Systems go up and down completely randomly.

Pair Corralation between High Arctic and Pason Systems

Assuming the 90 days trading horizon High Arctic is expected to generate 1.04 times less return on investment than Pason Systems. In addition to that, High Arctic is 2.22 times more volatile than Pason Systems. It trades about 0.04 of its total potential returns per unit of risk. Pason Systems is currently generating about 0.1 per unit of volatility. If you would invest  1,085  in Pason Systems on April 21, 2025 and sell it today you would earn a total of  111.00  from holding Pason Systems or generate 10.23% return on investment over 90 days.

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

High Arctic Energy  vs.  Pason Systems

High Arctic Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in High Arctic Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, High Arctic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pason Systems

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pason Systems are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Pason Systems may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with High Arctic and Pason Systems

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

The idea behind High Arctic Energy and Pason Systems 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.