Correlation Between Green Globe and Heating Oil
Can any of the company-specific risk be diversified away by investing in both Green Globe and Heating Oil 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 Green Globe and Heating Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Globe International and Heating Oil, you can compare the effects of market volatilities on Green Globe and Heating Oil 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 Green Globe with a short position of Heating Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Globe and Heating Oil.
Diversification Opportunities for Green Globe and Heating Oil
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Green and Heating is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Green Globe International and Heating Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heating Oil and Green Globe 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 Green Globe International are associated (or correlated) with Heating Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heating Oil has no effect on the direction of Green Globe i.e., Green Globe and Heating Oil go up and down completely randomly.
Pair Corralation between Green Globe and Heating Oil
Given the investment horizon of 90 days Green Globe International is expected to generate 16.86 times more return on investment than Heating Oil. However, Green Globe is 16.86 times more volatile than Heating Oil. It trades about 0.14 of its potential returns per unit of risk. Heating Oil is currently generating about -0.05 per unit of risk. If you would invest 0.03 in Green Globe International on September 1, 2024 and sell it today you would earn a total of 0.01 from holding Green Globe International or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Green Globe International vs. Heating Oil
Performance |
| Timeline |
| Green Globe International |
| Heating Oil |
Green Globe and Heating Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Globe and Heating Oil
The main advantage of trading using opposite Green Globe and Heating Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Globe position performs unexpectedly, Heating Oil 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 Heating Oil will offset losses from the drop in Heating Oil's long position.| Green Globe vs. Kaival Brands Innovations | Green Globe vs. Greenlane Holdings | Green Globe vs. RLX Technology | Green Globe vs. 22nd Century Group |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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