Correlation Between Vicinity and GreenPower
Can any of the company-specific risk be diversified away by investing in both Vicinity 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 Vicinity and GreenPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Motor Corp and GreenPower Motor, you can compare the effects of market volatilities on Vicinity 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 Vicinity with a short position of GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and GreenPower.
Diversification Opportunities for Vicinity and GreenPower
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vicinity and GreenPower is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor and Vicinity 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 Vicinity Motor 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 Vicinity i.e., Vicinity and GreenPower go up and down completely randomly.
Pair Corralation between Vicinity and GreenPower
Considering the 90-day investment horizon Vicinity Motor Corp is expected to under-perform the GreenPower. In addition to that, Vicinity is 2.61 times more volatile than GreenPower Motor. It trades about -0.19 of its total potential returns per unit of risk. GreenPower Motor is currently generating about 0.06 per unit of volatility. If you would invest 123.00 in GreenPower Motor on September 2, 2024 and sell it today you would earn a total of 17.00 from holding GreenPower Motor or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Motor Corp vs. GreenPower Motor
Performance |
| Timeline |
| Vicinity Motor Corp |
| GreenPower Motor |
Vicinity and GreenPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity and GreenPower
The main advantage of trading using opposite Vicinity and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity 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.| Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |