Correlation Between Greif, and HE Equipment
Can any of the company-specific risk be diversified away by investing in both Greif, and HE Equipment 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 Greif, and HE Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greif, Inc and HE Equipment Services, you can compare the effects of market volatilities on Greif, and HE Equipment 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 Greif, with a short position of HE Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greif, and HE Equipment.
Diversification Opportunities for Greif, and HE Equipment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greif, and HEES is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Greif, Inc and HE Equipment Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HE Equipment Services and Greif, 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 Greif, Inc are associated (or correlated) with HE Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HE Equipment Services has no effect on the direction of Greif, i.e., Greif, and HE Equipment go up and down completely randomly.
Pair Corralation between Greif, and HE Equipment
Given the investment horizon of 90 days Greif, Inc is expected to generate 0.57 times more return on investment than HE Equipment. However, Greif, Inc is 1.75 times less risky than HE Equipment. It trades about 0.05 of its potential returns per unit of risk. HE Equipment Services is currently generating about -0.11 per unit of risk. If you would invest 7,275 in Greif, Inc on September 14, 2024 and sell it today you would earn a total of 77.00 from holding Greif, Inc or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greif, Inc vs. HE Equipment Services
Performance |
| Timeline |
| Greif, Inc |
| HE Equipment Services |
Greif, and HE Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greif, and HE Equipment
The main advantage of trading using opposite Greif, and HE Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greif, position performs unexpectedly, HE Equipment 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 HE Equipment will offset losses from the drop in HE Equipment's long position.| Greif, vs. Magnite | Greif, vs. Entravision Communications | Greif, vs. CarsalesCom Ltd ADR | Greif, vs. GEN Restaurant Group, |
| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Herc Holdings | HE Equipment vs. Alta Equipment Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |