Correlation Between Green Globe and 22nd Century
Can any of the company-specific risk be diversified away by investing in both Green Globe and 22nd Century 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 22nd Century 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 22nd Century Group, you can compare the effects of market volatilities on Green Globe and 22nd Century 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 22nd Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Globe and 22nd Century.
Diversification Opportunities for Green Globe and 22nd Century
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and 22nd is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Green Globe International and 22nd Century Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 22nd Century Group 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 22nd Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 22nd Century Group has no effect on the direction of Green Globe i.e., Green Globe and 22nd Century go up and down completely randomly.
Pair Corralation between Green Globe and 22nd Century
Given the investment horizon of 90 days Green Globe is expected to generate 7.0 times less return on investment than 22nd Century. But when comparing it to its historical volatility, Green Globe International is 4.42 times less risky than 22nd Century. It trades about 0.03 of its potential returns per unit of risk. 22nd Century Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,889 in 22nd Century Group on November 3, 2024 and sell it today you would lose (1,478) from holding 22nd Century Group or give up 78.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Globe International vs. 22nd Century Group
Performance |
| Timeline |
| Green Globe International |
| 22nd Century Group |
Green Globe and 22nd Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Globe and 22nd Century
The main advantage of trading using opposite Green Globe and 22nd Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Globe position performs unexpectedly, 22nd Century 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 22nd Century will offset losses from the drop in 22nd Century'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 |
| 22nd Century vs. Turning Point Brands | 22nd Century vs. Green Globe International | 22nd Century vs. Imperial Brands PLC | 22nd Century vs. Kaival Brands Innovations |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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