Correlation Between Arax Holdings and Green Planet
Can any of the company-specific risk be diversified away by investing in both Arax Holdings and Green Planet 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 Arax Holdings and Green Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arax Holdings Corp and Green Planet Bio, you can compare the effects of market volatilities on Arax Holdings and Green Planet 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 Arax Holdings with a short position of Green Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arax Holdings and Green Planet.
Diversification Opportunities for Arax Holdings and Green Planet
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arax and Green is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Arax Holdings Corp and Green Planet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Planet Bio and Arax Holdings 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 Arax Holdings Corp are associated (or correlated) with Green Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Planet Bio has no effect on the direction of Arax Holdings i.e., Arax Holdings and Green Planet go up and down completely randomly.
Pair Corralation between Arax Holdings and Green Planet
Given the investment horizon of 90 days Arax Holdings is expected to generate 18.12 times less return on investment than Green Planet. But when comparing it to its historical volatility, Arax Holdings Corp is 8.71 times less risky than Green Planet. It trades about 0.06 of its potential returns per unit of risk. Green Planet Bio is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Green Planet Bio on September 12, 2024 and sell it today you would lose (56.00) from holding Green Planet Bio or give up 50.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arax Holdings Corp vs. Green Planet Bio
Performance |
| Timeline |
| Arax Holdings Corp |
| Green Planet Bio |
Arax Holdings and Green Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arax Holdings and Green Planet
The main advantage of trading using opposite Arax Holdings and Green Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arax Holdings position performs unexpectedly, Green Planet 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 Planet will offset losses from the drop in Green Planet's long position.| Arax Holdings vs. Green Planet Bio | Arax Holdings vs. Azure Holding Group | Arax Holdings vs. Four Leaf Acquisition | Arax Holdings vs. Opus Magnum Ameris |
| Green Planet vs. EDP Energias | Green Planet vs. CP ALL Public | Green Planet vs. Niagara Mohawk Power | Green Planet vs. The Siam Cement |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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