Correlation Between Great West and EcoSynthetix
Can any of the company-specific risk be diversified away by investing in both Great West and EcoSynthetix 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 Great West and EcoSynthetix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifeco and EcoSynthetix, you can compare the effects of market volatilities on Great West and EcoSynthetix 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 Great West with a short position of EcoSynthetix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and EcoSynthetix.
Diversification Opportunities for Great West and EcoSynthetix
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and EcoSynthetix is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix and Great West 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 Great West Lifeco are associated (or correlated) with EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of Great West i.e., Great West and EcoSynthetix go up and down completely randomly.
Pair Corralation between Great West and EcoSynthetix
Assuming the 90 days trading horizon Great West is expected to generate 3.48 times less return on investment than EcoSynthetix. But when comparing it to its historical volatility, Great West Lifeco is 2.95 times less risky than EcoSynthetix. It trades about 0.12 of its potential returns per unit of risk. EcoSynthetix is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 392.00 in EcoSynthetix on September 13, 2024 and sell it today you would earn a total of 26.00 from holding EcoSynthetix or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifeco vs. EcoSynthetix
Performance |
| Timeline |
| Great West Lifeco |
| EcoSynthetix |
Great West and EcoSynthetix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and EcoSynthetix
The main advantage of trading using opposite Great West and EcoSynthetix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, EcoSynthetix 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 EcoSynthetix will offset losses from the drop in EcoSynthetix's long position.| Great West vs. Highwood Asset Management | Great West vs. Western Investment | Great West vs. Guru Organic Energy | Great West vs. Goodfood Market Corp |
| EcoSynthetix vs. DIRTT Environmental Solutions | EcoSynthetix vs. 5N Plus | EcoSynthetix vs. Colabor Group | EcoSynthetix vs. TeraGo Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges |