Correlation Between GreenPower and Telus Corp
Can any of the company-specific risk be diversified away by investing in both GreenPower and Telus 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 Telus 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 Telus Corp, you can compare the effects of market volatilities on GreenPower and Telus 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 Telus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Telus Corp.
Diversification Opportunities for GreenPower and Telus Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenPower and Telus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus 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 Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of GreenPower i.e., GreenPower and Telus Corp go up and down completely randomly.
Pair Corralation between GreenPower and Telus Corp
Assuming the 90 days horizon GreenPower Motor is expected to generate 6.49 times more return on investment than Telus Corp. However, GreenPower is 6.49 times more volatile than Telus Corp. It trades about 0.01 of its potential returns per unit of risk. Telus Corp is currently generating about 0.01 per unit of risk. If you would invest 162.00 in GreenPower Motor on September 5, 2024 and sell it today you would lose (26.00) from holding GreenPower Motor or give up 16.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Telus Corp
Performance |
| Timeline |
| GreenPower Motor |
| Telus Corp |
GreenPower and Telus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Telus Corp
The main advantage of trading using opposite GreenPower and Telus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Telus 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 Telus Corp will offset losses from the drop in Telus Corp's long position.| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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