Correlation Between GreenTech Environmental and V V

Can any of the company-specific risk be diversified away by investing in both GreenTech Environmental and V V 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 GreenTech Environmental and V V into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GreenTech Environmental Co and V V Food, you can compare the effects of market volatilities on GreenTech Environmental and V V 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 GreenTech Environmental with a short position of V V. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTech Environmental and V V.

Diversification Opportunities for GreenTech Environmental and V V

0.66

Correlation Coefficient

GreenTech Environmental  V V

Poor diversification

The 3 months correlation between GreenTech and 600300 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GreenTech Environmental Co and V V Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V V Food and GreenTech Environmental 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 GreenTech Environmental Co are associated (or correlated) with V V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V V Food has no effect on the direction of GreenTech Environmental i.e., GreenTech Environmental and V V go up and down completely randomly.

Pair Corralation between GreenTech Environmental and V V

Assuming the 90 days trading horizon GreenTech Environmental Co is expected to under-perform the V V. In addition to that, GreenTech Environmental is 1.58 times more volatile than V V Food. It trades about -0.01 of its total potential returns per unit of risk. V V Food is currently generating about 0.01 per unit of volatility. If you would invest  321.00  in V V Food on October 5, 2024 and sell it today you would earn a total of  6.00  from holding V V Food or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GreenTech Environmental Co  vs.  V V Food

GreenTech Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenTech Environmental Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GreenTech Environmental is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

V V Food

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V V Food are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V V sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenTech Environmental and V V

The main advantage of trading using opposite GreenTech Environmental and V V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTech Environmental position performs unexpectedly, V V 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 V V will offset losses from the drop in V V's long position.

The idea behind GreenTech Environmental Co and V V Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.