Correlation Between Crown Electrokinetics and Gevo
Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and Gevo 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 Crown Electrokinetics and Gevo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Electrokinetics Corp and Gevo Inc, you can compare the effects of market volatilities on Crown Electrokinetics and Gevo 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 Crown Electrokinetics with a short position of Gevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Gevo.
Diversification Opportunities for Crown Electrokinetics and Gevo
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crown and Gevo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Gevo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gevo Inc and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Gevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gevo Inc has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Gevo go up and down completely randomly.
Pair Corralation between Crown Electrokinetics and Gevo
Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Gevo. In addition to that, Crown Electrokinetics is 1.12 times more volatile than Gevo Inc. It trades about -0.48 of its total potential returns per unit of risk. Gevo Inc is currently generating about -0.21 per unit of volatility. If you would invest 270.00 in Gevo Inc on August 30, 2024 and sell it today you would lose (110.00) from holding Gevo Inc or give up 40.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Crown Electrokinetics Corp vs. Gevo Inc
Performance |
| Timeline |
| Crown Electrokinetics |
| Gevo Inc |
Crown Electrokinetics and Gevo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Electrokinetics and Gevo
The main advantage of trading using opposite Crown Electrokinetics and Gevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Electrokinetics position performs unexpectedly, Gevo 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 Gevo will offset losses from the drop in Gevo's long position.| Crown Electrokinetics vs. Coroware | Crown Electrokinetics vs. Loop Industries | Crown Electrokinetics vs. Hudson Technologies | Crown Electrokinetics vs. General Environmental Management |
| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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