Correlation Between DIRTT Environmental and PyroGenesis Canada

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

Diversification Opportunities for DIRTT Environmental and PyroGenesis Canada

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between DIRTT and PyroGenesis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DIRTT Environmental Solutions and PyroGenesis Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PyroGenesis Canada 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 PyroGenesis Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PyroGenesis Canada has no effect on the direction of DIRTT Environmental i.e., DIRTT Environmental and PyroGenesis Canada go up and down completely randomly.

Pair Corralation between DIRTT Environmental and PyroGenesis Canada

Assuming the 90 days trading horizon DIRTT Environmental is expected to generate 1.5 times less return on investment than PyroGenesis Canada. But when comparing it to its historical volatility, DIRTT Environmental Solutions is 2.4 times less risky than PyroGenesis Canada. It trades about 0.06 of its potential returns per unit of risk. PyroGenesis Canada is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  28.00  in PyroGenesis Canada on October 11, 2025 and sell it today you would earn a total of  1.00  from holding PyroGenesis Canada or generate 3.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

DIRTT Environmental Solutions  vs.  PyroGenesis Canada

 Performance 
       Timeline  
DIRTT Environmental 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DIRTT Environmental Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, DIRTT Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.
PyroGenesis Canada 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PyroGenesis Canada are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, PyroGenesis Canada displayed solid returns over the last few months and may actually be approaching a breakup point.

DIRTT Environmental and PyroGenesis Canada Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DIRTT Environmental and PyroGenesis Canada

The main advantage of trading using opposite DIRTT Environmental and PyroGenesis Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIRTT Environmental position performs unexpectedly, PyroGenesis Canada 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 PyroGenesis Canada will offset losses from the drop in PyroGenesis Canada's long position.
The idea behind DIRTT Environmental Solutions and PyroGenesis Canada 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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