Correlation Between GrowGeneration Corp and Aemetis
Can any of the company-specific risk be diversified away by investing in both GrowGeneration Corp and Aemetis 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 GrowGeneration Corp and Aemetis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrowGeneration Corp and Aemetis, you can compare the effects of market volatilities on GrowGeneration Corp and Aemetis 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 GrowGeneration Corp with a short position of Aemetis. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrowGeneration Corp and Aemetis.
Diversification Opportunities for GrowGeneration Corp and Aemetis
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GrowGeneration and Aemetis is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GrowGeneration Corp and Aemetis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aemetis and GrowGeneration Corp 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 GrowGeneration Corp are associated (or correlated) with Aemetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aemetis has no effect on the direction of GrowGeneration Corp i.e., GrowGeneration Corp and Aemetis go up and down completely randomly.
Pair Corralation between GrowGeneration Corp and Aemetis
Given the investment horizon of 90 days GrowGeneration Corp is expected to under-perform the Aemetis. But the stock apears to be less risky and, when comparing its historical volatility, GrowGeneration Corp is 1.69 times less risky than Aemetis. The stock trades about -0.04 of its potential returns per unit of risk. The Aemetis is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 265.00 in Aemetis on September 2, 2024 and sell it today you would earn a total of 144.00 from holding Aemetis or generate 54.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrowGeneration Corp vs. Aemetis
Performance |
| Timeline |
| GrowGeneration Corp |
| Aemetis |
GrowGeneration Corp and Aemetis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrowGeneration Corp and Aemetis
The main advantage of trading using opposite GrowGeneration Corp and Aemetis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrowGeneration Corp position performs unexpectedly, Aemetis 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 Aemetis will offset losses from the drop in Aemetis' long position.| GrowGeneration Corp vs. Evgo Inc | GrowGeneration Corp vs. Ulta Beauty | GrowGeneration Corp vs. Best Buy Co | GrowGeneration Corp vs. RH |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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