Correlation Between Green Impact and EverGen Infrastructure

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

By analyzing existing cross correlation between Green Impact Partners and EverGen Infrastructure Corp, you can compare the effects of market volatilities on Green Impact and EverGen Infrastructure 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 Impact with a short position of EverGen Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Impact and EverGen Infrastructure.

Diversification Opportunities for Green Impact and EverGen Infrastructure

-0.02

Correlation Coefficient

Green Impact  EverGen Infrastructure

Good diversification

The 3 months correlation between Green and EverGen is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Green Impact Partners and EverGen Infrastructure Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverGen Infrastructure and Green Impact 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 Impact Partners are associated (or correlated) with EverGen Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverGen Infrastructure has no effect on the direction of Green Impact i.e., Green Impact and EverGen Infrastructure go up and down completely randomly.

Pair Corralation between Green Impact and EverGen Infrastructure

Assuming the 90 days horizon Green Impact Partners is expected to generate 1.45 times more return on investment than EverGen Infrastructure. However, Green Impact is 1.45 times more volatile than EverGen Infrastructure Corp. It trades about 0.07 of its potential returns per unit of risk. EverGen Infrastructure Corp is currently generating about -0.24 per unit of risk. If you would invest  334.00  in Green Impact Partners on September 4, 2024 and sell it today you would earn a total of  36.00  from holding Green Impact Partners or generate 10.78% return on investment over 90 days.

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

Green Impact Partners  vs.  EverGen Infrastructure Corp

Green Impact Partners

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Green Impact Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Green Impact showed solid returns over the last few months and may actually be approaching a breakup point.

EverGen Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EverGen Infrastructure Corp 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Green Impact and EverGen Infrastructure

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

The idea behind Green Impact Partners and EverGen Infrastructure Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.