Correlation Between Coastal Capital and Green Planet
Can any of the company-specific risk be diversified away by investing in both Coastal Capital 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 Coastal Capital and Green Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Capital Acq and Green Planet Bio, you can compare the effects of market volatilities on Coastal Capital 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 Coastal Capital with a short position of Green Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Capital and Green Planet.
Diversification Opportunities for Coastal Capital and Green Planet
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coastal and Green is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Capital Acq 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 Coastal Capital 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 Coastal Capital Acq 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 Coastal Capital i.e., Coastal Capital and Green Planet go up and down completely randomly.
Pair Corralation between Coastal Capital and Green Planet
Given the investment horizon of 90 days Coastal Capital is expected to generate 5.3 times less return on investment than Green Planet. But when comparing it to its historical volatility, Coastal Capital Acq is 4.68 times less risky than Green Planet. It trades about 0.1 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coastal Capital Acq vs. Green Planet Bio
Performance |
| Timeline |
| Coastal Capital Acq |
| Green Planet Bio |
Coastal Capital and Green Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Capital and Green Planet
The main advantage of trading using opposite Coastal Capital and Green Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Capital 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.| Coastal Capital vs. Green Planet Bio | Coastal Capital vs. Azure Holding Group | Coastal Capital vs. Four Leaf Acquisition | Coastal Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |