Correlation Between Global Clean and Local Bounti
Can any of the company-specific risk be diversified away by investing in both Global Clean and Local Bounti 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 Local Bounti 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 Local Bounti Corp, you can compare the effects of market volatilities on Global Clean and Local Bounti 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 Local Bounti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Clean and Local Bounti.
Diversification Opportunities for Global Clean and Local Bounti
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Local is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Global Clean Energy and Local Bounti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Local Bounti Corp 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 Local Bounti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Local Bounti Corp has no effect on the direction of Global Clean i.e., Global Clean and Local Bounti go up and down completely randomly.
Pair Corralation between Global Clean and Local Bounti
Given the investment horizon of 90 days Global Clean Energy is expected to under-perform the Local Bounti. In addition to that, Global Clean is 2.3 times more volatile than Local Bounti Corp. It trades about -0.42 of its total potential returns per unit of risk. Local Bounti Corp is currently generating about 0.06 per unit of volatility. If you would invest 209.00 in Local Bounti Corp on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Local Bounti Corp or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Global Clean Energy vs. Local Bounti Corp
Performance |
| Timeline |
| Global Clean Energy |
| Local Bounti Corp |
Global Clean and Local Bounti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Clean and Local Bounti
The main advantage of trading using opposite Global Clean and Local Bounti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Clean position performs unexpectedly, Local Bounti 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 Local Bounti will offset losses from the drop in Local Bounti'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 |
| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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