Correlation Between Telus Corp and GreenPower
Can any of the company-specific risk be diversified away by investing in both Telus Corp and GreenPower 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 Telus Corp and GreenPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and GreenPower Motor, you can compare the effects of market volatilities on Telus Corp and GreenPower 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 Telus Corp with a short position of GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and GreenPower.
Diversification Opportunities for Telus Corp and GreenPower
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telus and GreenPower is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor and Telus Corp 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 Telus Corp are associated (or correlated) with GreenPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPower Motor has no effect on the direction of Telus Corp i.e., Telus Corp and GreenPower go up and down completely randomly.
Pair Corralation between Telus Corp and GreenPower
Given the investment horizon of 90 days Telus Corp is expected to generate 0.21 times more return on investment than GreenPower. However, Telus Corp is 4.81 times less risky than GreenPower. It trades about 0.1 of its potential returns per unit of risk. GreenPower Motor is currently generating about 0.01 per unit of risk. If you would invest 2,195 in Telus Corp on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Telus Corp or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. GreenPower Motor
Performance |
| Timeline |
| Telus Corp |
| GreenPower Motor |
Telus Corp and GreenPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and GreenPower
The main advantage of trading using opposite Telus Corp and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp position performs unexpectedly, GreenPower 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 GreenPower will offset losses from the drop in GreenPower's long position.| Telus Corp vs. Berkshire Hathaway CDR | Telus Corp vs. Microsoft Corp CDR | Telus Corp vs. Apple Inc CDR | Telus Corp vs. Alphabet Inc CDR |
| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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