Correlation Between GreenPower and Lindsay
Can any of the company-specific risk be diversified away by investing in both GreenPower and Lindsay 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 Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Lindsay, you can compare the effects of market volatilities on GreenPower and Lindsay 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 Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Lindsay.
Diversification Opportunities for GreenPower and Lindsay
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenPower and Lindsay is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay 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 Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of GreenPower i.e., GreenPower and Lindsay go up and down completely randomly.
Pair Corralation between GreenPower and Lindsay
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Lindsay. In addition to that, GreenPower is 2.51 times more volatile than Lindsay. It trades about -0.01 of its total potential returns per unit of risk. Lindsay is currently generating about 0.01 per unit of volatility. If you would invest 13,847 in Lindsay on November 1, 2024 and sell it today you would lose (226.00) from holding Lindsay or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Lindsay
Performance |
| Timeline |
| GreenPower Motor |
| Lindsay |
GreenPower and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Lindsay
The main advantage of trading using opposite GreenPower and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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