Correlation Between Pond Technologies and Global Clean
Can any of the company-specific risk be diversified away by investing in both Pond Technologies and Global Clean 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 Pond Technologies and Global Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pond Technologies Holdings and Global Clean Energy, you can compare the effects of market volatilities on Pond Technologies and Global Clean 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 Pond Technologies with a short position of Global Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pond Technologies and Global Clean.
Diversification Opportunities for Pond Technologies and Global Clean
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pond and Global is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pond Technologies Holdings and Global Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Clean Energy and Pond Technologies 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 Pond Technologies Holdings are associated (or correlated) with Global Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Clean Energy has no effect on the direction of Pond Technologies i.e., Pond Technologies and Global Clean go up and down completely randomly.
Pair Corralation between Pond Technologies and Global Clean
Assuming the 90 days horizon Pond Technologies Holdings is expected to generate 2.25 times more return on investment than Global Clean. However, Pond Technologies is 2.25 times more volatile than Global Clean Energy. It trades about 0.05 of its potential returns per unit of risk. Global Clean Energy is currently generating about 0.03 per unit of risk. If you would invest 6.35 in Pond Technologies Holdings on September 3, 2024 and sell it today you would lose (5.45) from holding Pond Technologies Holdings or give up 85.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pond Technologies Holdings vs. Global Clean Energy
Performance |
| Timeline |
| Pond Technologies |
| Global Clean Energy |
Pond Technologies and Global Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pond Technologies and Global Clean
The main advantage of trading using opposite Pond Technologies and Global Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pond Technologies position performs unexpectedly, Global Clean 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 Global Clean will offset losses from the drop in Global Clean's long position.| Pond Technologies vs. Golden Agri Resources | Pond Technologies vs. Global Clean Energy | Pond Technologies vs. Edible Garden AG | Pond Technologies vs. Local Bounti Corp |
| Global Clean vs. Edible Garden AG | Global Clean vs. Golden Agri Resources | Global Clean vs. Local Bounti Corp | Global Clean vs. Village Farms International |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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