Correlation Between GREEN PLAINS and SCANDMEDICAL SOLDK-040

Can any of the company-specific risk be diversified away by investing in both GREEN PLAINS and SCANDMEDICAL SOLDK-040 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 GREEN PLAINS and SCANDMEDICAL SOLDK-040 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GREEN PLAINS RENEW and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on GREEN PLAINS and SCANDMEDICAL SOLDK-040 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 GREEN PLAINS with a short position of SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREEN PLAINS and SCANDMEDICAL SOLDK-040.

Diversification Opportunities for GREEN PLAINS and SCANDMEDICAL SOLDK-040

0.54

Correlation Coefficient

GREEN PLAINS  SCANDMEDICAL SOLDK-040

Very weak diversification

The 3 months correlation between GREEN and SCANDMEDICAL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GREEN PLAINS RENEW and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 and GREEN PLAINS 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 GREEN PLAINS RENEW are associated (or correlated) with SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of GREEN PLAINS i.e., GREEN PLAINS and SCANDMEDICAL SOLDK-040 go up and down completely randomly.

Pair Corralation between GREEN PLAINS and SCANDMEDICAL SOLDK-040

Assuming the 90 days trading horizon GREEN PLAINS RENEW is expected to under-perform the SCANDMEDICAL SOLDK-040. But the stock apears to be less risky and, when comparing its historical volatility, GREEN PLAINS RENEW is 2.5 times less risky than SCANDMEDICAL SOLDK-040. The stock trades about -0.06 of its potential returns per unit of risk. The SCANDMEDICAL SOLDK 040 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  101.00  in SCANDMEDICAL SOLDK 040 on October 24, 2024 and sell it today you would lose (30.00) from holding SCANDMEDICAL SOLDK 040 or give up 29.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

GREEN PLAINS RENEW  vs.  SCANDMEDICAL SOLDK 040

GREEN PLAINS RENEW

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GREEN PLAINS RENEW are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, GREEN PLAINS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GREEN PLAINS and SCANDMEDICAL SOLDK-040

The main advantage of trading using opposite GREEN PLAINS and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREEN PLAINS position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.

The idea behind GREEN PLAINS RENEW and SCANDMEDICAL SOLDK 040 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.