Correlation Between GreenPower and Volcon
Can any of the company-specific risk be diversified away by investing in both GreenPower and Volcon 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 Volcon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Volcon Inc, you can compare the effects of market volatilities on GreenPower and Volcon 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 Volcon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Volcon.
Diversification Opportunities for GreenPower and Volcon
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GreenPower and Volcon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Volcon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcon Inc 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 Volcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcon Inc has no effect on the direction of GreenPower i.e., GreenPower and Volcon go up and down completely randomly.
Pair Corralation between GreenPower and Volcon
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 0.34 times more return on investment than Volcon. However, GreenPower Motor is 2.97 times less risky than Volcon. It trades about -0.13 of its potential returns per unit of risk. Volcon Inc is currently generating about -0.5 per unit of risk. If you would invest 81.00 in GreenPower Motor on November 18, 2024 and sell it today you would lose (8.00) from holding GreenPower Motor or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Volcon Inc
Performance |
| Timeline |
| GreenPower Motor |
| Volcon Inc |
GreenPower and Volcon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Volcon
The main advantage of trading using opposite GreenPower and Volcon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Volcon 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 Volcon will offset losses from the drop in Volcon's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Volcon vs. AYRO Inc | Volcon vs. Workhorse Group | Volcon vs. GreenPower Motor | Volcon vs. Cenntro Electric 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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