Correlation Between Edible Garden and Global Clean
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Global Clean 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 Edible Garden and Global Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edible Garden AG and Global Clean Energy, you can compare the effects of market volatilities on Edible Garden and Global Clean 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 Edible Garden with a short position of Global Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Global Clean.
Diversification Opportunities for Edible Garden and Global Clean
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Edible and Global is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Global Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Clean Energy and Edible Garden 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 Edible Garden AG are associated (or correlated) with Global Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Clean Energy has no effect on the direction of Edible Garden i.e., Edible Garden and Global Clean go up and down completely randomly.
Pair Corralation between Edible Garden and Global Clean
Assuming the 90 days horizon Edible Garden AG is expected to generate 3.56 times more return on investment than Global Clean. However, Edible Garden is 3.56 times more volatile than Global Clean Energy. It trades about 0.14 of its potential returns per unit of risk. Global Clean Energy is currently generating about -0.21 per unit of risk. If you would invest 3.15 in Edible Garden AG on November 6, 2024 and sell it today you would earn a total of 0.55 from holding Edible Garden AG or generate 17.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
Edible Garden AG vs. Global Clean Energy
Performance |
Timeline |
Edible Garden AG |
Global Clean Energy |
Edible Garden and Global Clean Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Edible Garden and Global Clean
The main advantage of trading using opposite Edible Garden and Global Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Global Clean 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 Global Clean will offset losses from the drop in Global Clean's long position.Edible Garden vs. Edible Garden AG | Edible Garden vs. Dermata Therapeutics Warrant | Edible Garden vs. Iveda Solutions Warrant | Edible Garden vs. Aclarion |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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