Correlation Between Green Plains and NanoXplore
Can any of the company-specific risk be diversified away by investing in both Green Plains and NanoXplore 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 Green Plains and NanoXplore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Plains Renewable and NanoXplore, you can compare the effects of market volatilities on Green Plains and NanoXplore 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 Green Plains with a short position of NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Plains and NanoXplore.
Diversification Opportunities for Green Plains and NanoXplore
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and NanoXplore is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Green Plains Renewable and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore and Green Plains 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 Green Plains Renewable are associated (or correlated) with NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of Green Plains i.e., Green Plains and NanoXplore go up and down completely randomly.
Pair Corralation between Green Plains and NanoXplore
Given the investment horizon of 90 days Green Plains Renewable is expected to under-perform the NanoXplore. In addition to that, Green Plains is 1.55 times more volatile than NanoXplore. It trades about -0.15 of its total potential returns per unit of risk. NanoXplore is currently generating about -0.16 per unit of volatility. If you would invest 179.00 in NanoXplore on September 1, 2024 and sell it today you would lose (15.00) from holding NanoXplore or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Green Plains Renewable vs. NanoXplore
Performance |
| Timeline |
| Green Plains Renewable |
| NanoXplore |
Green Plains and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Plains and NanoXplore
The main advantage of trading using opposite Green Plains and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Plains position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore's long position.| Green Plains vs. Lsb Industries | Green Plains vs. AdvanSix | Green Plains vs. Tronox Holdings PLC | Green Plains vs. Methanex |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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