Correlation Between GreenPower and Global Industrial
Can any of the company-specific risk be diversified away by investing in both GreenPower and Global Industrial 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 Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Global Industrial Co, you can compare the effects of market volatilities on GreenPower and Global Industrial 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 Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Global Industrial.
Diversification Opportunities for GreenPower and Global Industrial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenPower and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial 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 Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of GreenPower i.e., GreenPower and Global Industrial go up and down completely randomly.
Pair Corralation between GreenPower and Global Industrial
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 0.86 times more return on investment than Global Industrial. However, GreenPower Motor is 1.17 times less risky than Global Industrial. It trades about 0.02 of its potential returns per unit of risk. Global Industrial Co is currently generating about -0.09 per unit of risk. If you would invest 101.00 in GreenPower Motor on August 30, 2024 and sell it today you would earn a total of 0.00 from holding GreenPower Motor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Global Industrial Co
Performance |
| Timeline |
| GreenPower Motor |
| Global Industrial |
GreenPower and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Global Industrial
The main advantage of trading using opposite GreenPower and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial's long position.| GreenPower vs. Hyster Yale Materials Handling | GreenPower vs. Columbus McKinnon | GreenPower vs. AGCO Corporation | GreenPower vs. Titan International |
| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial vs. BlueLinx Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |