Correlation Between Global Clean and AppHarvest
Can any of the company-specific risk be diversified away by investing in both Global Clean and AppHarvest 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 Global Clean and AppHarvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Clean Energy and AppHarvest, you can compare the effects of market volatilities on Global Clean and AppHarvest 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 Global Clean with a short position of AppHarvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Clean and AppHarvest.
Diversification Opportunities for Global Clean and AppHarvest
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and AppHarvest is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global Clean Energy and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest and Global Clean 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 Global Clean Energy are associated (or correlated) with AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Global Clean i.e., Global Clean and AppHarvest go up and down completely randomly.
Pair Corralation between Global Clean and AppHarvest
Given the investment horizon of 90 days Global Clean Energy is expected to generate 0.62 times more return on investment than AppHarvest. However, Global Clean Energy is 1.62 times less risky than AppHarvest. It trades about 0.03 of its potential returns per unit of risk. AppHarvest is currently generating about -0.07 per unit of risk. If you would invest 129.00 in Global Clean Energy on August 31, 2024 and sell it today you would lose (30.00) from holding Global Clean Energy or give up 23.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.51% |
| Values | Daily Returns |
Global Clean Energy vs. AppHarvest
Performance |
| Timeline |
| Global Clean Energy |
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Clean and AppHarvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Clean and AppHarvest
The main advantage of trading using opposite Global Clean and AppHarvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Clean position performs unexpectedly, AppHarvest 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 AppHarvest will offset losses from the drop in AppHarvest's long position.| Global Clean vs. Edible Garden AG | Global Clean vs. Golden Agri Resources | Global Clean vs. Local Bounti Corp | Global Clean vs. Village Farms International |
| AppHarvest vs. Porch Group | AppHarvest vs. Hydrofarm Holdings Group | AppHarvest vs. Danimer Scientific | AppHarvest vs. Open Lending 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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