Correlation Between Anything Tech and Green Cures

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Can any of the company-specific risk be diversified away by investing in both Anything Tech and Green Cures 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 Anything Tech and Green Cures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anything Tech Media and Green Cures Botanical, you can compare the effects of market volatilities on Anything Tech and Green Cures 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 Anything Tech with a short position of Green Cures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anything Tech and Green Cures.

Diversification Opportunities for Anything Tech and Green Cures

AnythingGreenDiversified AwayAnythingGreenDiversified Away100%
0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Anything and Green is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Anything Tech Media and Green Cures Botanical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cures Botanical and Anything Tech 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 Anything Tech Media are associated (or correlated) with Green Cures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cures Botanical has no effect on the direction of Anything Tech i.e., Anything Tech and Green Cures go up and down completely randomly.

Pair Corralation between Anything Tech and Green Cures

Given the investment horizon of 90 days Anything Tech is expected to generate 8.6 times less return on investment than Green Cures. But when comparing it to its historical volatility, Anything Tech Media is 2.52 times less risky than Green Cures. It trades about 0.05 of its potential returns per unit of risk. Green Cures Botanical is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Green Cures Botanical on November 24, 2024 and sell it today you would lose (0.01) from holding Green Cures Botanical or give up 50.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Anything Tech Media  vs.  Green Cures Botanical

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 20406080100
JavaScript chart by amCharts 3.21.15EXMT GRCU
       Timeline  
Anything Tech Media 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Anything Tech Media are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Anything Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00040.000450.00050.000550.00060.000650.0007
Green Cures Botanical 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Green Cures Botanical are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Green Cures unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.00010.000120.000140.000160.000180.0002

Anything Tech and Green Cures Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-62.3-46.66-31.02-15.380.2615.831.8747.9464.01 0.00020.00040.00060.00080.0010
JavaScript chart by amCharts 3.21.15EXMT GRCU
       Returns  

Pair Trading with Anything Tech and Green Cures

The main advantage of trading using opposite Anything Tech and Green Cures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anything Tech position performs unexpectedly, Green Cures 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 Cures will offset losses from the drop in Green Cures' long position.
The idea behind Anything Tech Media and Green Cures Botanical 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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