Correlation Between GreenPower and Birchtech Corp
Can any of the company-specific risk be diversified away by investing in both GreenPower and Birchtech Corp 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 Birchtech Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Birchtech Corp, you can compare the effects of market volatilities on GreenPower and Birchtech Corp 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 Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Birchtech Corp.
Diversification Opportunities for GreenPower and Birchtech Corp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GreenPower and Birchtech is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech Corp 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 Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of GreenPower i.e., GreenPower and Birchtech Corp go up and down completely randomly.
Pair Corralation between GreenPower and Birchtech Corp
Assuming the 90 days horizon GreenPower Motor is expected to under-perform the Birchtech Corp. In addition to that, GreenPower is 1.46 times more volatile than Birchtech Corp. It trades about -0.03 of its total potential returns per unit of risk. Birchtech Corp is currently generating about -0.01 per unit of volatility. If you would invest 98.00 in Birchtech Corp on September 12, 2024 and sell it today you would lose (3.00) from holding Birchtech Corp or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 6.84% |
| Values | Daily Returns |
GreenPower Motor vs. Birchtech Corp
Performance |
| Timeline |
| GreenPower Motor |
| Birchtech Corp |
GreenPower and Birchtech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Birchtech Corp
The main advantage of trading using opposite GreenPower and Birchtech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Birchtech Corp 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 Birchtech Corp will offset losses from the drop in Birchtech Corp's long position.| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
| Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Amazon CDR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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