Correlation Between GreenPower and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both GreenPower and Vast Renewables 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 Vast Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Vast Renewables Limited, you can compare the effects of market volatilities on GreenPower and Vast Renewables 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 Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Vast Renewables.
Diversification Opportunities for GreenPower and Vast Renewables
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenPower and Vast is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables 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 Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of GreenPower i.e., GreenPower and Vast Renewables go up and down completely randomly.
Pair Corralation between GreenPower and Vast Renewables
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Vast Renewables. But the stock apears to be less risky and, when comparing its historical volatility, GreenPower Motor is 3.49 times less risky than Vast Renewables. The stock trades about -0.06 of its potential returns per unit of risk. The Vast Renewables Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Vast Renewables Limited on August 26, 2024 and sell it today you would lose (935.00) from holding Vast Renewables Limited or give up 85.0% 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. Vast Renewables Limited
Performance |
| Timeline |
| GreenPower Motor |
| Vast Renewables |
GreenPower and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Vast Renewables
The main advantage of trading using opposite GreenPower and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Vast Renewables vs. 1847 Holdings LLC | Vast Renewables vs. Westport Fuel Systems | Vast Renewables vs. Falcons Beyond Global, | Vast Renewables vs. Brookfield Business Partners |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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