Correlation Between Maytronics and Palram

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

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

Diversification Opportunities for Maytronics and Palram

0.36

Correlation Coefficient

Maytronics  Palram

Weak diversification

The 3 months correlation between Maytronics and Palram is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Maytronics and Palram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palram and Maytronics 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 Maytronics are associated (or correlated) with Palram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palram has no effect on the direction of Maytronics i.e., Maytronics and Palram go up and down completely randomly.

Pair Corralation between Maytronics and Palram

Assuming the 90 days trading horizon Maytronics is expected to generate 1.97 times more return on investment than Palram. However, Maytronics is 1.97 times more volatile than Palram. It trades about 0.08 of its potential returns per unit of risk. Palram is currently generating about -0.02 per unit of risk. If you would invest  39,760  in Maytronics on April 25, 2025 and sell it today you would earn a total of  5,840  from holding Maytronics or generate 14.69% return on investment over 90 days.

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

Maytronics  vs.  Palram

Maytronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maytronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Maytronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Palram

Risk-Adjusted Performance

Very Weak

Over the last 90 days Palram has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Palram is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Maytronics and Palram

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

The idea behind Maytronics and Palram 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.