Correlation Between Green Globe and For Earth

Can any of the company-specific risk be diversified away by investing in both Green Globe and For Earth 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 For Earth 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 For The Earth, you can compare the effects of market volatilities on Green Globe and For Earth 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 For Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Globe and For Earth.

Diversification Opportunities for Green Globe and For Earth

0.0

Correlation Coefficient

Green Globe  For Earth

Pay attention - limited upside

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

Pair Corralation between Green Globe and For Earth

If you would invest  0.04  in Green Globe International on December 26, 2024 and sell it today you would lose (0.02) from holding Green Globe International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Green Globe International  vs.  For The Earth

Green Globe International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green Globe International are ranked lower than 12 (%) 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.

For The Earth

Risk-Adjusted Performance

Very Weak

Over the last 90 days For The Earth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, For Earth is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Green Globe and For Earth

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

The idea behind Green Globe International and For The Earth 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.