Correlation Between Deere and GiveMePower Corp

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

By analyzing existing cross correlation between Deere Company and GiveMePower Corp, you can compare the effects of market volatilities on Deere and GiveMePower Corp 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 Deere with a short position of GiveMePower Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deere and GiveMePower Corp.

Diversification Opportunities for Deere and GiveMePower Corp

-0.07

Correlation Coefficient

Deere  GiveMePower Corp

Good diversification

The 3 months correlation between Deere and GiveMePower is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Deere Company and GiveMePower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiveMePower Corp and Deere 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 Deere Company are associated (or correlated) with GiveMePower Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiveMePower Corp has no effect on the direction of Deere i.e., Deere and GiveMePower Corp go up and down completely randomly.

Pair Corralation between Deere and GiveMePower Corp

Allowing for the 90-day total investment horizon Deere is expected to generate 6.68 times less return on investment than GiveMePower Corp. But when comparing it to its historical volatility, Deere Company is 11.41 times less risky than GiveMePower Corp. It trades about 0.11 of its potential returns per unit of risk. GiveMePower Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.70  in GiveMePower Corp on December 26, 2024 and sell it today you would lose (0.19) from holding GiveMePower Corp or give up 27.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Deere Company  vs.  GiveMePower Corp

Deere Company

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deere Company are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Deere exhibited solid returns over the last few months and may actually be approaching a breakup point.

GiveMePower Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GiveMePower Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, GiveMePower Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deere and GiveMePower Corp

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

The idea behind Deere Company and GiveMePower Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.