Correlation Between Kits Eyecare and Greenlane Renewables
Can any of the company-specific risk be diversified away by investing in both Kits Eyecare and Greenlane Renewables 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 Kits Eyecare and Greenlane Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kits Eyecare and Greenlane Renewables, you can compare the effects of market volatilities on Kits Eyecare and Greenlane Renewables 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 Kits Eyecare with a short position of Greenlane Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kits Eyecare and Greenlane Renewables.
Diversification Opportunities for Kits Eyecare and Greenlane Renewables
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kits and Greenlane is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kits Eyecare and Greenlane Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Renewables and Kits Eyecare 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 Kits Eyecare are associated (or correlated) with Greenlane Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Renewables has no effect on the direction of Kits Eyecare i.e., Kits Eyecare and Greenlane Renewables go up and down completely randomly.
Pair Corralation between Kits Eyecare and Greenlane Renewables
Assuming the 90 days trading horizon Kits Eyecare is expected to generate 0.53 times more return on investment than Greenlane Renewables. However, Kits Eyecare is 1.88 times less risky than Greenlane Renewables. It trades about 0.1 of its potential returns per unit of risk. Greenlane Renewables is currently generating about -0.03 per unit of risk. If you would invest 263.00 in Kits Eyecare on August 31, 2024 and sell it today you would earn a total of 622.00 from holding Kits Eyecare or generate 236.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kits Eyecare vs. Greenlane Renewables
Performance |
| Timeline |
| Kits Eyecare |
| Greenlane Renewables |
Kits Eyecare and Greenlane Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kits Eyecare and Greenlane Renewables
The main advantage of trading using opposite Kits Eyecare and Greenlane Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kits Eyecare position performs unexpectedly, Greenlane Renewables 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 Greenlane Renewables will offset losses from the drop in Greenlane Renewables' long position.| Kits Eyecare vs. Data Communications Management | Kits Eyecare vs. Haivision Systems | Kits Eyecare vs. Thinkific Labs |
| Greenlane Renewables vs. Baylin Technologies | Greenlane Renewables vs. Supremex | Greenlane Renewables vs. iShares Canadian HYBrid | Greenlane Renewables vs. Brompton European Dividend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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