Correlation Between Green River and Boomer Holdings
Can any of the company-specific risk be diversified away by investing in both Green River and Boomer Holdings 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 Green River and Boomer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green River Gold and Boomer Holdings, you can compare the effects of market volatilities on Green River and Boomer Holdings 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 Green River with a short position of Boomer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green River and Boomer Holdings.
Diversification Opportunities for Green River and Boomer Holdings
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Boomer is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Green River Gold and Boomer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boomer Holdings and Green River 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 Green River Gold are associated (or correlated) with Boomer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boomer Holdings has no effect on the direction of Green River i.e., Green River and Boomer Holdings go up and down completely randomly.
Pair Corralation between Green River and Boomer Holdings
Assuming the 90 days horizon Green River Gold is expected to generate 1.59 times more return on investment than Boomer Holdings. However, Green River is 1.59 times more volatile than Boomer Holdings. It trades about 0.03 of its potential returns per unit of risk. Boomer Holdings is currently generating about -0.01 per unit of risk. If you would invest 6.00 in Green River Gold on August 24, 2024 and sell it today you would lose (5.42) from holding Green River Gold or give up 90.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.47% |
| Values | Daily Returns |
Green River Gold vs. Boomer Holdings
Performance |
| Timeline |
| Green River Gold |
| Boomer Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Green River and Boomer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green River and Boomer Holdings
The main advantage of trading using opposite Green River and Boomer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green River position performs unexpectedly, Boomer Holdings 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 Boomer Holdings will offset losses from the drop in Boomer Holdings' long position.| Green River vs. Burlington Stores | Green River vs. Childrens Place | Green River vs. Buckle Inc | Green River vs. Shoe Carnival |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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