Correlation Between G6 Materials and Greystone Logistics
Can any of the company-specific risk be diversified away by investing in both G6 Materials and Greystone Logistics 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 G6 Materials and Greystone Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G6 Materials Corp and Greystone Logistics, you can compare the effects of market volatilities on G6 Materials and Greystone Logistics 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 G6 Materials with a short position of Greystone Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of G6 Materials and Greystone Logistics.
Diversification Opportunities for G6 Materials and Greystone Logistics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GPHBF and Greystone is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding G6 Materials Corp and Greystone Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Logistics and G6 Materials 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 G6 Materials Corp are associated (or correlated) with Greystone Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Logistics has no effect on the direction of G6 Materials i.e., G6 Materials and Greystone Logistics go up and down completely randomly.
Pair Corralation between G6 Materials and Greystone Logistics
Assuming the 90 days horizon G6 Materials Corp is expected to generate 2.62 times more return on investment than Greystone Logistics. However, G6 Materials is 2.62 times more volatile than Greystone Logistics. It trades about 0.01 of its potential returns per unit of risk. Greystone Logistics is currently generating about -0.01 per unit of risk. If you would invest 5.10 in G6 Materials Corp on September 1, 2024 and sell it today you would lose (2.10) from holding G6 Materials Corp or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G6 Materials Corp vs. Greystone Logistics
Performance |
| Timeline |
| G6 Materials Corp |
| Greystone Logistics |
G6 Materials and Greystone Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G6 Materials and Greystone Logistics
The main advantage of trading using opposite G6 Materials and Greystone Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G6 Materials position performs unexpectedly, Greystone Logistics 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 Greystone Logistics will offset losses from the drop in Greystone Logistics' long position.| G6 Materials vs. Sherwin Williams Co | G6 Materials vs. Air Liquide SA | G6 Materials vs. Air Products and | G6 Materials vs. Ecolab Inc |
| Greystone Logistics vs. TSS, Common Stock | Greystone Logistics vs. Noble Romans | Greystone Logistics vs. Pacific Health Care | Greystone Logistics vs. Surge Components |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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