Correlation Between Global Clean and AquaBounty Technologies
Can any of the company-specific risk be diversified away by investing in both Global Clean and AquaBounty Technologies 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 AquaBounty Technologies 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 AquaBounty Technologies, you can compare the effects of market volatilities on Global Clean and AquaBounty Technologies 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 AquaBounty Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Clean and AquaBounty Technologies.
Diversification Opportunities for Global Clean and AquaBounty Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and AquaBounty is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Global Clean Energy and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies 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 AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of Global Clean i.e., Global Clean and AquaBounty Technologies go up and down completely randomly.
Pair Corralation between Global Clean and AquaBounty Technologies
Given the investment horizon of 90 days Global Clean Energy is expected to generate 1.16 times more return on investment than AquaBounty Technologies. However, Global Clean is 1.16 times more volatile than AquaBounty Technologies. It trades about 0.03 of its potential returns per unit of risk. AquaBounty Technologies is currently generating about -0.02 per unit of risk. If you would invest 91.00 in Global Clean Energy on August 25, 2024 and sell it today you would lose (4.00) from holding Global Clean Energy or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Global Clean Energy vs. AquaBounty Technologies
Performance |
| Timeline |
| Global Clean Energy |
| AquaBounty Technologies |
Global Clean and AquaBounty Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Clean and AquaBounty Technologies
The main advantage of trading using opposite Global Clean and AquaBounty Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Clean position performs unexpectedly, AquaBounty Technologies 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 AquaBounty Technologies will offset losses from the drop in AquaBounty Technologies' long position.| Global Clean vs. Embotelladora Andina SA | Global Clean vs. Signet International Holdings | Global Clean vs. National Beverage Corp | Global Clean vs. PT Astra International |
| AquaBounty Technologies vs. Atlantic Sapphire ASA | AquaBounty Technologies vs. Local Bounti Corp | AquaBounty Technologies vs. Forafric Global PLC | AquaBounty Technologies vs. Forafric Global PLC |
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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