Correlation Between Cenntro Electric and GreenPower

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

By analyzing existing cross correlation between Cenntro Electric Group and GreenPower Motor, you can compare the effects of market volatilities on Cenntro Electric 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 Cenntro Electric with a short position of GreenPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenntro Electric and GreenPower.

Diversification Opportunities for Cenntro Electric and GreenPower

0.67

Correlation Coefficient

Cenntro Electric  GreenPower

Poor diversification

The 3 months correlation between Cenntro and GreenPower is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cenntro Electric Group and GreenPower Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPower Motor and Cenntro Electric 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 Cenntro Electric Group 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 Cenntro Electric i.e., Cenntro Electric and GreenPower go up and down completely randomly.

Pair Corralation between Cenntro Electric and GreenPower

Given the investment horizon of 90 days Cenntro Electric Group is expected to generate 1.04 times more return on investment than GreenPower. However, Cenntro Electric is 1.04 times more volatile than GreenPower Motor. It trades about -0.04 of its potential returns per unit of risk. GreenPower Motor is currently generating about -0.06 per unit of risk. If you would invest  108.00  in Cenntro Electric Group on December 29, 2024 and sell it today you would lose (23.00) from holding Cenntro Electric Group or give up 21.3% of portfolio value over 90 days.

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

Cenntro Electric Group  vs.  GreenPower Motor

Cenntro Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cenntro Electric Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GreenPower Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenPower Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Cenntro Electric and GreenPower

The main advantage of trading using opposite Cenntro Electric and GreenPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenntro Electric 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.

The idea behind Cenntro Electric Group and GreenPower Motor 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.