Correlation Between Galp Energia and Greenvolt Energias
Can any of the company-specific risk be diversified away by investing in both Galp Energia and Greenvolt Energias 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 Galp Energia and Greenvolt Energias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galp Energia SGPS and Greenvolt Energias Renovaveis, you can compare the effects of market volatilities on Galp Energia and Greenvolt Energias 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 Galp Energia with a short position of Greenvolt Energias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galp Energia and Greenvolt Energias.
Diversification Opportunities for Galp Energia and Greenvolt Energias
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galp and Greenvolt is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Galp Energia SGPS and Greenvolt Energias Renovaveis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenvolt Energias and Galp Energia 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 Galp Energia SGPS are associated (or correlated) with Greenvolt Energias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenvolt Energias has no effect on the direction of Galp Energia i.e., Galp Energia and Greenvolt Energias go up and down completely randomly.
Pair Corralation between Galp Energia and Greenvolt Energias
Assuming the 90 days trading horizon Galp Energia SGPS is expected to under-perform the Greenvolt Energias. In addition to that, Galp Energia is 2.97 times more volatile than Greenvolt Energias Renovaveis. It trades about -0.17 of its total potential returns per unit of risk. Greenvolt Energias Renovaveis is currently generating about 0.19 per unit of volatility. If you would invest 809.00 in Greenvolt Energias Renovaveis on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Greenvolt Energias Renovaveis or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Galp Energia SGPS vs. Greenvolt Energias Renovaveis
Performance |
| Timeline |
| Galp Energia SGPS |
| Greenvolt Energias |
Galp Energia and Greenvolt Energias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galp Energia and Greenvolt Energias
The main advantage of trading using opposite Galp Energia and Greenvolt Energias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galp Energia position performs unexpectedly, Greenvolt Energias 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 Greenvolt Energias will offset losses from the drop in Greenvolt Energias' long position.| Galp Energia vs. EDP Energias | Galp Energia vs. Sonae SGPS SA | Galp Energia vs. Banco Comercial Portugues | Galp Energia vs. NOS SGPS SA |
| Greenvolt Energias vs. Altri SGPS SA | Greenvolt Energias vs. The Navigator | Greenvolt Energias vs. Galp Energia SGPS | Greenvolt Energias vs. EDP Renovaveis |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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