Correlation Between Goodfood Market and CVW CleanTech

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

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

Diversification Opportunities for Goodfood Market and CVW CleanTech

0.18

Correlation Coefficient

Goodfood Market  CVW CleanTech

Average diversification

The 3 months correlation between Goodfood and CVW is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Goodfood Market i.e., Goodfood Market and CVW CleanTech go up and down completely randomly.

Pair Corralation between Goodfood Market and CVW CleanTech

Assuming the 90 days trading horizon Goodfood Market Corp is expected to generate 1.64 times more return on investment than CVW CleanTech. However, Goodfood Market is 1.64 times more volatile than CVW CleanTech. It trades about 0.19 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.02 per unit of risk. If you would invest  28.00  in Goodfood Market Corp on September 4, 2024 and sell it today you would earn a total of  18.00  from holding Goodfood Market Corp or generate 64.29% return on investment over 90 days.

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

Goodfood Market Corp  vs.  CVW CleanTech

Goodfood Market Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goodfood Market Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Goodfood Market displayed solid returns over the last few months and may actually be approaching a breakup point.

CVW CleanTech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CVW CleanTech are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, CVW CleanTech is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goodfood Market and CVW CleanTech

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

The idea behind Goodfood Market Corp and CVW CleanTech 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.