Correlation Between Great West and Solar Alliance
Can any of the company-specific risk be diversified away by investing in both Great West and Solar Alliance 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 Solar Alliance 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 Solar Alliance Energy, you can compare the effects of market volatilities on Great West and Solar Alliance 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 Solar Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Solar Alliance.
Diversification Opportunities for Great West and Solar Alliance
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Solar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and Solar Alliance Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Alliance Energy 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 Solar Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Alliance Energy has no effect on the direction of Great West i.e., Great West and Solar Alliance go up and down completely randomly.
Pair Corralation between Great West and Solar Alliance
If you would invest 1,902 in Great West Lifeco on September 13, 2024 and sell it today you would earn a total of 37.00 from holding Great West Lifeco or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Great West Lifeco vs. Solar Alliance Energy
Performance |
| Timeline |
| Great West Lifeco |
| Solar Alliance Energy |
Great West and Solar Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Solar Alliance
The main advantage of trading using opposite Great West and Solar Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Solar Alliance 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 Solar Alliance will offset losses from the drop in Solar Alliance'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 |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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