Correlation Between GreenPower and Corus Entertainment
Can any of the company-specific risk be diversified away by investing in both GreenPower and Corus Entertainment 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 Corus Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Corus Entertainment, you can compare the effects of market volatilities on GreenPower and Corus Entertainment 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 Corus Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Corus Entertainment.
Diversification Opportunities for GreenPower and Corus Entertainment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenPower and Corus is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment 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 Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of GreenPower i.e., GreenPower and Corus Entertainment go up and down completely randomly.
Pair Corralation between GreenPower and Corus Entertainment
Assuming the 90 days horizon GreenPower Motor is expected to generate 0.69 times more return on investment than Corus Entertainment. However, GreenPower Motor is 1.46 times less risky than Corus Entertainment. It trades about 0.06 of its potential returns per unit of risk. Corus Entertainment is currently generating about -0.04 per unit of risk. If you would invest 132.00 in GreenPower Motor on September 4, 2024 and sell it today you would earn a total of 5.00 from holding GreenPower Motor or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Corus Entertainment
Performance |
| Timeline |
| GreenPower Motor |
| Corus Entertainment |
GreenPower and Corus Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Corus Entertainment
The main advantage of trading using opposite GreenPower and Corus Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Corus Entertainment 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 Corus Entertainment will offset losses from the drop in Corus Entertainment's long position.| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
| Corus Entertainment vs. AltaGas | Corus Entertainment vs. Transcontinental | Corus Entertainment vs. NorthWest Healthcare Properties | Corus Entertainment vs. Aecon 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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