Correlation Between GreenPower and ECD Automotive
Can any of the company-specific risk be diversified away by investing in both GreenPower and ECD Automotive 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 ECD Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and ECD Automotive Design, you can compare the effects of market volatilities on GreenPower and ECD Automotive 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 ECD Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and ECD Automotive.
Diversification Opportunities for GreenPower and ECD Automotive
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GreenPower and ECD is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and ECD Automotive Design in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECD Automotive Design 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 ECD Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECD Automotive Design has no effect on the direction of GreenPower i.e., GreenPower and ECD Automotive go up and down completely randomly.
Pair Corralation between GreenPower and ECD Automotive
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 0.2 times more return on investment than ECD Automotive. However, GreenPower Motor is 5.05 times less risky than ECD Automotive. It trades about 0.04 of its potential returns per unit of risk. ECD Automotive Design is currently generating about -0.05 per unit of risk. If you would invest 95.00 in GreenPower Motor on September 4, 2024 and sell it today you would earn a total of 2.00 from holding GreenPower Motor or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
GreenPower Motor vs. ECD Automotive Design
Performance |
| Timeline |
| GreenPower Motor |
| ECD Automotive Design |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
GreenPower and ECD Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and ECD Automotive
The main advantage of trading using opposite GreenPower and ECD Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, ECD Automotive 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 ECD Automotive will offset losses from the drop in ECD Automotive's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| ECD Automotive vs. Park Hotels Resorts | ECD Automotive vs. Senmiao Technology | ECD Automotive vs. Pinterest | ECD Automotive vs. Freedom Internet Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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