Correlation Between Alimentation Couchen and Green River
Can any of the company-specific risk be diversified away by investing in both Alimentation Couchen and Green River 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 Alimentation Couchen and Green River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimentation Couchen Tard and Green River Gold, you can compare the effects of market volatilities on Alimentation Couchen and Green River 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 Alimentation Couchen with a short position of Green River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimentation Couchen and Green River.
Diversification Opportunities for Alimentation Couchen and Green River
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alimentation and Green is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard and Green River Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green River Gold and Alimentation Couchen 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 Alimentation Couchen Tard are associated (or correlated) with Green River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green River Gold has no effect on the direction of Alimentation Couchen i.e., Alimentation Couchen and Green River go up and down completely randomly.
Pair Corralation between Alimentation Couchen and Green River
Assuming the 90 days horizon Alimentation Couchen Tard is expected to under-perform the Green River. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alimentation Couchen Tard is 11.87 times less risky than Green River. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Green River Gold is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 0.58 in Green River Gold on November 3, 2024 and sell it today you would earn a total of 0.42 from holding Green River Gold or generate 72.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Alimentation Couchen Tard vs. Green River Gold
Performance |
| Timeline |
| Alimentation Couchen Tard |
| Green River Gold |
Alimentation Couchen and Green River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimentation Couchen and Green River
The main advantage of trading using opposite Alimentation Couchen and Green River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen position performs unexpectedly, Green River 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 Green River will offset losses from the drop in Green River's long position.| Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Sportsmans | Alimentation Couchen vs. Murphy USA |
| Green River vs. Dixons Carphone plc | Green River vs. Ceconomy AG ADR | Green River vs. Tandy Leather Factory | Green River vs. Card Factory plc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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