Correlation Between ABACUS STORAGE and Greenvale Energy
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Greenvale Energy 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 ABACUS STORAGE and Greenvale Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Greenvale Energy, you can compare the effects of market volatilities on ABACUS STORAGE and Greenvale Energy 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 ABACUS STORAGE with a short position of Greenvale Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Greenvale Energy.
Diversification Opportunities for ABACUS STORAGE and Greenvale Energy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABACUS and Greenvale is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Greenvale Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenvale Energy and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Greenvale Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenvale Energy has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Greenvale Energy go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Greenvale Energy
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to under-perform the Greenvale Energy. But the stock apears to be less risky and, when comparing its historical volatility, ABACUS STORAGE KING is 5.38 times less risky than Greenvale Energy. The stock trades about -0.12 of its potential returns per unit of risk. The Greenvale Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Greenvale Energy on September 1, 2024 and sell it today you would earn a total of 0.60 from holding Greenvale Energy or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Greenvale Energy
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Greenvale Energy |
ABACUS STORAGE and Greenvale Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Greenvale Energy
The main advantage of trading using opposite ABACUS STORAGE and Greenvale Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Greenvale Energy 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 Greenvale Energy will offset losses from the drop in Greenvale Energy's long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Imricor Medical Systems | ABACUS STORAGE vs. Midway |
| Greenvale Energy vs. Nufarm Finance NZ | Greenvale Energy vs. Queste Communications | Greenvale Energy vs. American West Metals | Greenvale Energy vs. Dug Technology |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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