Correlation Between Eq Energy and Greene Concepts

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

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

Diversification Opportunities for Eq Energy and Greene Concepts

0.51

Correlation Coefficient

Eq Energy  Greene Concepts

Very weak diversification

The 3 months correlation between EQLB and Greene is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eq Energy Drink and Greene Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene Concepts and Eq Energy 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 Eq Energy Drink are associated (or correlated) with Greene Concepts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene Concepts has no effect on the direction of Eq Energy i.e., Eq Energy and Greene Concepts go up and down completely randomly.

Pair Corralation between Eq Energy and Greene Concepts

Given the investment horizon of 90 days Eq Energy Drink is expected to generate 2.21 times more return on investment than Greene Concepts. However, Eq Energy is 2.21 times more volatile than Greene Concepts. It trades about -0.02 of its potential returns per unit of risk. Greene Concepts is currently generating about -0.1 per unit of risk. If you would invest  0.17  in Eq Energy Drink on September 4, 2024 and sell it today you would lose (0.09) from holding Eq Energy Drink or give up 52.94% of portfolio value over 90 days.

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

Eq Energy Drink  vs.  Greene Concepts

Eq Energy Drink

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eq Energy Drink has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Greene Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greene Concepts 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 forward-looking signals remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Eq Energy and Greene Concepts

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

The idea behind Eq Energy Drink and Greene Concepts 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..