Correlation Between GreenPower and Columbus McKinnon
Can any of the company-specific risk be diversified away by investing in both GreenPower and Columbus McKinnon 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 Columbus McKinnon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Columbus McKinnon, you can compare the effects of market volatilities on GreenPower and Columbus McKinnon 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 Columbus McKinnon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Columbus McKinnon.
Diversification Opportunities for GreenPower and Columbus McKinnon
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GreenPower and Columbus is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon 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 Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of GreenPower i.e., GreenPower and Columbus McKinnon go up and down completely randomly.
Pair Corralation between GreenPower and Columbus McKinnon
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Columbus McKinnon. In addition to that, GreenPower is 2.9 times more volatile than Columbus McKinnon. It trades about -0.02 of its total potential returns per unit of risk. Columbus McKinnon is currently generating about 0.01 per unit of volatility. If you would invest 3,690 in Columbus McKinnon on November 6, 2024 and sell it today you would lose (48.00) from holding Columbus McKinnon or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Columbus McKinnon
Performance |
| Timeline |
| GreenPower Motor |
| Columbus McKinnon |
GreenPower and Columbus McKinnon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Columbus McKinnon
The main advantage of trading using opposite GreenPower and Columbus McKinnon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Columbus McKinnon 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 Columbus McKinnon will offset losses from the drop in Columbus McKinnon's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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