Correlation Between GreenPower and Oshkosh
Can any of the company-specific risk be diversified away by investing in both GreenPower and Oshkosh 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 Oshkosh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Oshkosh, you can compare the effects of market volatilities on GreenPower and Oshkosh 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 Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Oshkosh.
Diversification Opportunities for GreenPower and Oshkosh
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenPower and Oshkosh is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of GreenPower i.e., GreenPower and Oshkosh go up and down completely randomly.
Pair Corralation between GreenPower and Oshkosh
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Oshkosh. In addition to that, GreenPower is 1.79 times more volatile than Oshkosh. It trades about -0.32 of its total potential returns per unit of risk. Oshkosh is currently generating about 0.08 per unit of volatility. If you would invest 10,957 in Oshkosh on August 27, 2024 and sell it today you would earn a total of 457.00 from holding Oshkosh or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Oshkosh
Performance |
| Timeline |
| GreenPower Motor |
| Oshkosh |
GreenPower and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Oshkosh
The main advantage of trading using opposite GreenPower and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| GreenPower vs. Lion Electric Corp | GreenPower vs. Xos Inc | GreenPower vs. Hydrofarm Holdings Group | GreenPower vs. AGCO Corporation |
| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitex International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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