Correlation Between Gevo and Givaudan
Can any of the company-specific risk be diversified away by investing in both Gevo and Givaudan 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 Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gevo Inc and Givaudan SA ADR, you can compare the effects of market volatilities on Gevo and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gevo and Givaudan.
Diversification Opportunities for Gevo and Givaudan
Very good diversification
The 3 months correlation between Gevo and Givaudan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Gevo Inc and Givaudan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA ADR 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA ADR has no effect on the direction of Gevo i.e., Gevo and Givaudan go up and down completely randomly.
Pair Corralation between Gevo and Givaudan
Given the investment horizon of 90 days Gevo Inc is expected to generate 4.79 times more return on investment than Givaudan. However, Gevo is 4.79 times more volatile than Givaudan SA ADR. It trades about 0.03 of its potential returns per unit of risk. Givaudan SA ADR is currently generating about 0.07 per unit of risk. If you would invest 158.00 in Gevo Inc on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Gevo Inc or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gevo Inc vs. Givaudan SA ADR
Performance |
| Timeline |
| Gevo Inc |
| Givaudan SA ADR |
Gevo and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gevo and Givaudan
The main advantage of trading using opposite Gevo and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gevo position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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