Correlation Between ITM Power and Greenshift Corp
Can any of the company-specific risk be diversified away by investing in both ITM Power and Greenshift 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 ITM Power and Greenshift Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Power Plc and Greenshift Corp, you can compare the effects of market volatilities on ITM Power and Greenshift 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 ITM Power with a short position of Greenshift Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Power and Greenshift Corp.
Diversification Opportunities for ITM Power and Greenshift Corp
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITM and Greenshift is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ITM Power Plc and Greenshift Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenshift Corp and ITM Power 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 ITM Power Plc are associated (or correlated) with Greenshift Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenshift Corp has no effect on the direction of ITM Power i.e., ITM Power and Greenshift Corp go up and down completely randomly.
Pair Corralation between ITM Power and Greenshift Corp
Assuming the 90 days horizon ITM Power Plc is expected to under-perform the Greenshift Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, ITM Power Plc is 3.23 times less risky than Greenshift Corp. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Greenshift Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.40 in Greenshift Corp on September 3, 2024 and sell it today you would lose (1.60) from holding Greenshift Corp or give up 36.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
ITM Power Plc vs. Greenshift Corp
Performance |
| Timeline |
| ITM Power Plc |
| Greenshift Corp |
ITM Power and Greenshift Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Power and Greenshift Corp
The main advantage of trading using opposite ITM Power and Greenshift Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Power position performs unexpectedly, Greenshift 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 Greenshift Corp will offset losses from the drop in Greenshift Corp's long position.| ITM Power vs. Dear Cashmere Holding | ITM Power vs. Goff Corp | ITM Power vs. Wialan Technologies | ITM Power vs. Cgrowth Capital |
| Greenshift Corp vs. Seadrill Limited | Greenshift Corp vs. Noble plc | Greenshift Corp vs. Borr Drilling | Greenshift Corp vs. SCOR PK |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |