Correlation Between Gevo and Aemetis
Can any of the company-specific risk be diversified away by investing in both Gevo and Aemetis 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 Gevo and Aemetis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gevo Inc and Aemetis, you can compare the effects of market volatilities on Gevo and Aemetis 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 Gevo with a short position of Aemetis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gevo and Aemetis.
Diversification Opportunities for Gevo and Aemetis
Average diversification
The 3 months correlation between Gevo and Aemetis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gevo Inc and Aemetis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aemetis and Gevo 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 Gevo Inc are associated (or correlated) with Aemetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aemetis has no effect on the direction of Gevo i.e., Gevo and Aemetis go up and down completely randomly.
Pair Corralation between Gevo and Aemetis
Given the investment horizon of 90 days Gevo Inc is expected to under-perform the Aemetis. In addition to that, Gevo is 1.07 times more volatile than Aemetis. It trades about -0.11 of its total potential returns per unit of risk. Aemetis is currently generating about 0.28 per unit of volatility. If you would invest 265.00 in Aemetis on September 2, 2024 and sell it today you would earn a total of 144.00 from holding Aemetis or generate 54.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gevo Inc vs. Aemetis
Performance |
| Timeline |
| Gevo Inc |
| Aemetis |
Gevo and Aemetis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gevo and Aemetis
The main advantage of trading using opposite Gevo and Aemetis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gevo position performs unexpectedly, Aemetis 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 Aemetis will offset losses from the drop in Aemetis' long position.| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel Corp |
| Aemetis vs. PBF Energy | Aemetis vs. Clean Energy Fuels | Aemetis vs. Par Pacific Holdings | Aemetis vs. Vertex Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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