Correlation Between GreenPower and Shyft
Can any of the company-specific risk be diversified away by investing in both GreenPower and Shyft 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 Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Shyft Group, you can compare the effects of market volatilities on GreenPower and Shyft 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 Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Shyft.
Diversification Opportunities for GreenPower and Shyft
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenPower and Shyft is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft 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 Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of GreenPower i.e., GreenPower and Shyft go up and down completely randomly.
Pair Corralation between GreenPower and Shyft
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 3.0 times more return on investment than Shyft. However, GreenPower is 3.0 times more volatile than Shyft Group. It trades about 0.04 of its potential returns per unit of risk. Shyft Group is currently generating about 0.04 per unit of risk. If you would invest 91.00 in GreenPower Motor on August 28, 2024 and sell it today you would lose (1.00) from holding GreenPower Motor or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Shyft Group
Performance |
| Timeline |
| GreenPower Motor |
| Shyft Group |
GreenPower and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Shyft
The main advantage of trading using opposite GreenPower and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.| GreenPower vs. Lion Electric Corp | GreenPower vs. Xos Inc | GreenPower vs. Hydrofarm Holdings Group | GreenPower vs. AGCO Corporation |
| Shyft vs. Astec Industries | Shyft vs. Hyster Yale Materials Handling | Shyft vs. Manitex International | Shyft vs. Rev Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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