Correlation Between EON SE and Green Planet

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

By analyzing existing cross correlation between EON SE and Green Planet Bio, you can compare the effects of market volatilities on EON SE and Green Planet 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 EON SE with a short position of Green Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON SE and Green Planet.

Diversification Opportunities for EON SE and Green Planet

-0.46

Correlation Coefficient

EON SE  Green Planet

Very good diversification

The 3 months correlation between EON and Green is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding EON SE and Green Planet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Planet Bio and EON SE 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 EON SE are associated (or correlated) with Green Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Planet Bio has no effect on the direction of EON SE i.e., EON SE and Green Planet go up and down completely randomly.

Pair Corralation between EON SE and Green Planet

Assuming the 90 days horizon EON SE is expected to generate 74.24 times less return on investment than Green Planet. But when comparing it to its historical volatility, EON SE is 25.61 times less risky than Green Planet. It trades about 0.03 of its potential returns per unit of risk. Green Planet Bio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  241.00  in Green Planet Bio on September 26, 2024 and sell it today you would lose (187.00) from holding Green Planet Bio or give up 77.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.02%
Values	Daily Returns

EON SE  vs.  Green Planet Bio

EON SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Green Planet Bio

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Green Planet Bio are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Green Planet sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EON SE and Green Planet

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

The idea behind EON SE and Green Planet Bio 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.