Correlation Between GreenPower and Alamo
Can any of the company-specific risk be diversified away by investing in both GreenPower and Alamo 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 GreenPower and Alamo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Alamo Group, you can compare the effects of market volatilities on GreenPower and Alamo 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 GreenPower with a short position of Alamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Alamo.
Diversification Opportunities for GreenPower and Alamo
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenPower and Alamo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Alamo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Group and GreenPower 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 GreenPower Motor are associated (or correlated) with Alamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Group has no effect on the direction of GreenPower i.e., GreenPower and Alamo go up and down completely randomly.
Pair Corralation between GreenPower and Alamo
Allowing for the 90-day total investment horizon GreenPower is expected to generate 6.89 times less return on investment than Alamo. In addition to that, GreenPower is 1.53 times more volatile than Alamo Group. It trades about 0.02 of its total potential returns per unit of risk. Alamo Group is currently generating about 0.22 per unit of volatility. If you would invest 17,309 in Alamo Group on August 31, 2024 and sell it today you would earn a total of 2,480 from holding Alamo Group or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Alamo Group
Performance |
| Timeline |
| GreenPower Motor |
| Alamo Group |
GreenPower and Alamo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Alamo
The main advantage of trading using opposite GreenPower and Alamo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Alamo 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 Alamo will offset losses from the drop in Alamo's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Alamo vs. Hyster Yale Materials Handling | Alamo vs. Columbus McKinnon | Alamo vs. AGCO Corporation | Alamo vs. Titan International |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |