Correlation Between Greenlane Renewables and Supremex
Can any of the company-specific risk be diversified away by investing in both Greenlane Renewables and Supremex 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 Greenlane Renewables and Supremex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlane Renewables and Supremex, you can compare the effects of market volatilities on Greenlane Renewables and Supremex 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 Greenlane Renewables with a short position of Supremex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlane Renewables and Supremex.
Diversification Opportunities for Greenlane Renewables and Supremex
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greenlane and Supremex is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Renewables and Supremex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supremex and Greenlane Renewables 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 Greenlane Renewables are associated (or correlated) with Supremex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supremex has no effect on the direction of Greenlane Renewables i.e., Greenlane Renewables and Supremex go up and down completely randomly.
Pair Corralation between Greenlane Renewables and Supremex
Assuming the 90 days trading horizon Greenlane Renewables is expected to generate 6.02 times more return on investment than Supremex. However, Greenlane Renewables is 6.02 times more volatile than Supremex. It trades about 0.21 of its potential returns per unit of risk. Supremex is currently generating about 0.0 per unit of risk. If you would invest 6.50 in Greenlane Renewables on August 28, 2024 and sell it today you would earn a total of 3.50 from holding Greenlane Renewables or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlane Renewables vs. Supremex
Performance |
| Timeline |
| Greenlane Renewables |
| Supremex |
Greenlane Renewables and Supremex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlane Renewables and Supremex
The main advantage of trading using opposite Greenlane Renewables and Supremex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlane Renewables position performs unexpectedly, Supremex 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 Supremex will offset losses from the drop in Supremex's long position.| Greenlane Renewables vs. Solar Alliance Energy | Greenlane Renewables vs. Converge Technology Solutions | Greenlane Renewables vs. WELL Health Technologies |
| Supremex vs. Stella Jones | Supremex vs. Gildan Activewear | Supremex vs. Toromont Industries | Supremex vs. Waste Connections |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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