Correlation Between GreenFirst Forest and Propel Holdings

Can any of the company-specific risk be diversified away by investing in both GreenFirst Forest and Propel Holdings 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 GreenFirst Forest and Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GreenFirst Forest Products and Propel Holdings, you can compare the effects of market volatilities on GreenFirst Forest and Propel Holdings 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 GreenFirst Forest with a short position of Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenFirst Forest and Propel Holdings.

Diversification Opportunities for GreenFirst Forest and Propel Holdings

-0.66

Correlation Coefficient

GreenFirst Forest  Propel Holdings

Excellent diversification

The 3 months correlation between GreenFirst and Propel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings and GreenFirst Forest 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 GreenFirst Forest Products are associated (or correlated) with Propel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propel Holdings has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Propel Holdings go up and down completely randomly.

Pair Corralation between GreenFirst Forest and Propel Holdings

Assuming the 90 days trading horizon GreenFirst Forest Products is expected to under-perform the Propel Holdings. But the stock apears to be less risky and, when comparing its historical volatility, GreenFirst Forest Products is 1.44 times less risky than Propel Holdings. The stock trades about -0.24 of its potential returns per unit of risk. The Propel Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,155  in Propel Holdings on October 23, 2024 and sell it today you would earn a total of  504.00  from holding Propel Holdings or generate 15.97% return on investment over 90 days.

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

GreenFirst Forest Products  vs.  Propel Holdings

GreenFirst Forest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenFirst Forest Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Propel Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Propel Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Propel Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenFirst Forest and Propel Holdings

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

The idea behind GreenFirst Forest Products and Propel Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.