Correlation Between Green Globe and Charlies Holdings

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

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

Diversification Opportunities for Green Globe and Charlies Holdings

0.0

Correlation Coefficient

Green Globe  Charlies Holdings

Pay attention - limited upside

The 3 months correlation between Green and Charlies is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Green Globe International and Charlies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charlies Holdings and Green Globe 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 Globe International are associated (or correlated) with Charlies Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charlies Holdings has no effect on the direction of Green Globe i.e., Green Globe and Charlies Holdings go up and down completely randomly.

Pair Corralation between Green Globe and Charlies Holdings

If you would invest  0.03  in Green Globe International on December 29, 2024 and sell it today you would lose (0.01) from holding Green Globe International or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Green Globe International  vs.  Charlies Holdings

Green Globe International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Globe International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting forward indicators, Green Globe demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Charlies Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charlies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Charlies Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Green Globe and Charlies Holdings

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

The idea behind Green Globe International and Charlies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.