Correlation Between Perpetual Credit and Clean Seas

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

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

Diversification Opportunities for Perpetual Credit and Clean Seas

0.54

Correlation Coefficient

Perpetual Credit  Clean Seas

Very weak diversification

The 3 months correlation between Perpetual and Clean is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Perpetual Credit Income and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Perpetual Credit 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 Perpetual Credit Income are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Perpetual Credit i.e., Perpetual Credit and Clean Seas go up and down completely randomly.

Pair Corralation between Perpetual Credit and Clean Seas

Assuming the 90 days trading horizon Perpetual Credit is expected to generate 1.59 times less return on investment than Clean Seas. In addition to that, Perpetual Credit is 1.31 times more volatile than Clean Seas Seafood. It trades about 0.06 of its total potential returns per unit of risk. Clean Seas Seafood is currently generating about 0.13 per unit of volatility. If you would invest  13.00  in Clean Seas Seafood on April 20, 2025 and sell it today you would earn a total of  1.00  from holding Clean Seas Seafood or generate 7.69% return on investment over 90 days.

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

Perpetual Credit Income  vs.  Clean Seas Seafood

Perpetual Credit Income

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perpetual Credit Income are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Perpetual Credit is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clean Seas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Perpetual Credit and Clean Seas

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

The idea behind Perpetual Credit Income and Clean Seas Seafood 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.