Correlation Between Green Globe and Pyxus International

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

Diversification Opportunities for Green Globe and Pyxus International

0.09

Correlation Coefficient

Green Globe  Pyxus International

Significant diversification

The 3 months correlation between Green and Pyxus is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Green Globe International and Pyxus International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxus International 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 Pyxus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxus International has no effect on the direction of Green Globe i.e., Green Globe and Pyxus International go up and down completely randomly.

Pair Corralation between Green Globe and Pyxus International

Given the investment horizon of 90 days Green Globe International is expected to generate 2.17 times more return on investment than Pyxus International. However, Green Globe is 2.17 times more volatile than Pyxus International. It trades about 0.05 of its potential returns per unit of risk. Pyxus International is currently generating about 0.02 per unit of risk. If you would invest  0.05  in Green Globe International on September 5, 2024 and sell it today you would lose (0.01) from holding Green Globe International or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Green Globe International  vs.  Pyxus International

Green Globe International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Green Globe International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Green Globe demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pyxus International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pyxus International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Pyxus International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Green Globe and Pyxus International

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

The idea behind Green Globe International and Pyxus International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.