Correlation Between GreenPower and Rev
Can any of the company-specific risk be diversified away by investing in both GreenPower and Rev 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 Rev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Rev Group, you can compare the effects of market volatilities on GreenPower and Rev 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 Rev. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Rev.
Diversification Opportunities for GreenPower and Rev
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenPower and Rev is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Rev Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rev Group 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 Rev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rev Group has no effect on the direction of GreenPower i.e., GreenPower and Rev go up and down completely randomly.
Pair Corralation between GreenPower and Rev
Allowing for the 90-day total investment horizon GreenPower is expected to generate 2.17 times less return on investment than Rev. In addition to that, GreenPower is 2.15 times more volatile than Rev Group. It trades about 0.01 of its total potential returns per unit of risk. Rev Group is currently generating about 0.06 per unit of volatility. If you would invest 2,595 in Rev Group on August 30, 2024 and sell it today you would earn a total of 490.00 from holding Rev Group or generate 18.88% 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. Rev Group
Performance |
| Timeline |
| GreenPower Motor |
| Rev Group |
GreenPower and Rev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Rev
The main advantage of trading using opposite GreenPower and Rev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Rev 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 Rev will offset losses from the drop in Rev's long position.| GreenPower vs. Hyster Yale Materials Handling | GreenPower vs. Columbus McKinnon | GreenPower vs. AGCO Corporation | GreenPower vs. Titan 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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