Correlation Between ABACUS STORAGE and Greenvale Energy

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

By analyzing existing cross correlation between ABACUS STORAGE KING and Greenvale Energy, you can compare the effects of market volatilities on ABACUS STORAGE and Greenvale Energy 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 ABACUS STORAGE with a short position of Greenvale Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Greenvale Energy.

Diversification Opportunities for ABACUS STORAGE and Greenvale Energy

-0.58

Correlation Coefficient

ABACUS STORAGE  Greenvale Energy

Excellent diversification

The 3 months correlation between ABACUS and Greenvale is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Greenvale Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenvale Energy and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Greenvale Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenvale Energy has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Greenvale Energy go up and down completely randomly.

Pair Corralation between ABACUS STORAGE and Greenvale Energy

Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 9.44 times more return on investment than Greenvale Energy. However, ABACUS STORAGE is 9.44 times more volatile than Greenvale Energy. It trades about 0.06 of its potential returns per unit of risk. Greenvale Energy is currently generating about -0.03 per unit of risk. If you would invest  106.00  in ABACUS STORAGE KING on September 27, 2024 and sell it today you would earn a total of  13.00  from holding ABACUS STORAGE KING or generate 12.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

ABACUS STORAGE KING  vs.  Greenvale Energy

ABACUS STORAGE KING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABACUS STORAGE KING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Greenvale Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greenvale Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Greenvale Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ABACUS STORAGE and Greenvale Energy

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

The idea behind ABACUS STORAGE KING and Greenvale Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.