Correlation Between GreenPower and Hydrofarm Holdings
Can any of the company-specific risk be diversified away by investing in both GreenPower and Hydrofarm Holdings 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 Hydrofarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Hydrofarm Holdings Group, you can compare the effects of market volatilities on GreenPower and Hydrofarm Holdings 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 Hydrofarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Hydrofarm Holdings.
Diversification Opportunities for GreenPower and Hydrofarm Holdings
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenPower and Hydrofarm is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Hydrofarm Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrofarm Holdings 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 Hydrofarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrofarm Holdings has no effect on the direction of GreenPower i.e., GreenPower and Hydrofarm Holdings go up and down completely randomly.
Pair Corralation between GreenPower and Hydrofarm Holdings
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Hydrofarm Holdings. But the stock apears to be less risky and, when comparing its historical volatility, GreenPower Motor is 1.29 times less risky than Hydrofarm Holdings. The stock trades about -0.24 of its potential returns per unit of risk. The Hydrofarm Holdings Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Hydrofarm Holdings Group on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Hydrofarm Holdings Group or generate 19.12% 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. Hydrofarm Holdings Group
Performance |
| Timeline |
| GreenPower Motor |
| Hydrofarm Holdings |
GreenPower and Hydrofarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Hydrofarm Holdings
The main advantage of trading using opposite GreenPower and Hydrofarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Hydrofarm Holdings 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 Hydrofarm Holdings will offset losses from the drop in Hydrofarm Holdings' long position.| GreenPower vs. Lion Electric Corp | GreenPower vs. Xos Inc | GreenPower vs. Hydrofarm Holdings Group | GreenPower vs. AGCO Corporation |
| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. CubicFarm Systems Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |