Correlation Between ECN Capital and GreenPower
Can any of the company-specific risk be diversified away by investing in both ECN Capital and GreenPower 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 ECN Capital and GreenPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECN Capital Corp and GreenPower Motor, you can compare the effects of market volatilities on ECN Capital and GreenPower 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 ECN Capital with a short position of GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECN Capital and GreenPower.
Diversification Opportunities for ECN Capital and GreenPower
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECN and GreenPower is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor and ECN 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 ECN Capital Corp are associated (or correlated) with GreenPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPower Motor has no effect on the direction of ECN Capital i.e., ECN Capital and GreenPower go up and down completely randomly.
Pair Corralation between ECN Capital and GreenPower
Assuming the 90 days trading horizon ECN Capital Corp is expected to generate 0.44 times more return on investment than GreenPower. However, ECN Capital Corp is 2.3 times less risky than GreenPower. It trades about 0.13 of its potential returns per unit of risk. GreenPower Motor is currently generating about 0.03 per unit of risk. If you would invest 204.00 in ECN Capital Corp on November 3, 2024 and sell it today you would earn a total of 111.00 from holding ECN Capital Corp or generate 54.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECN Capital Corp vs. GreenPower Motor
Performance |
| Timeline |
| ECN Capital Corp |
| GreenPower Motor |
ECN Capital and GreenPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECN Capital and GreenPower
The main advantage of trading using opposite ECN Capital and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECN Capital position performs unexpectedly, GreenPower 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 GreenPower will offset losses from the drop in GreenPower's long position.| ECN Capital vs. Element Fleet Management | ECN Capital vs. Colliers International Group | ECN Capital vs. Altus Group Limited | ECN Capital vs. FirstService Corp |
| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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