Correlation Between Amyris and Gevo
Can any of the company-specific risk be diversified away by investing in both Amyris and Gevo 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 Amyris and Gevo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amyris Inc and Gevo Inc, you can compare the effects of market volatilities on Amyris and Gevo 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 Amyris with a short position of Gevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amyris and Gevo.
Diversification Opportunities for Amyris and Gevo
Very weak diversification
The 3 months correlation between Amyris and Gevo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Amyris Inc and Gevo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gevo Inc and Amyris 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 Amyris Inc are associated (or correlated) with Gevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gevo Inc has no effect on the direction of Amyris i.e., Amyris and Gevo go up and down completely randomly.
Pair Corralation between Amyris and Gevo
If you would invest 118.00 in Gevo Inc on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Gevo Inc or generate 33.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.34% |
| Values | Daily Returns |
Amyris Inc vs. Gevo Inc
Performance |
| Timeline |
| Amyris Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gevo Inc |
Amyris and Gevo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amyris and Gevo
The main advantage of trading using opposite Amyris and Gevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amyris position performs unexpectedly, Gevo 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 Gevo will offset losses from the drop in Gevo's long position.The idea behind Amyris Inc and Gevo Inc 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.| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel Corp |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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