Correlation Between GreenPower and Manitowoc

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

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

Diversification Opportunities for GreenPower and Manitowoc

-0.15

Correlation Coefficient

GreenPower  Manitowoc

Good diversification

The 3 months correlation between GreenPower and Manitowoc is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and GreenPower 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 GreenPower Motor are associated (or correlated) with Manitowoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitowoc has no effect on the direction of GreenPower i.e., GreenPower and Manitowoc go up and down completely randomly.

Pair Corralation between GreenPower and Manitowoc

Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Manitowoc. In addition to that, GreenPower is 1.82 times more volatile than Manitowoc. It trades about -0.06 of its total potential returns per unit of risk. Manitowoc is currently generating about 0.02 per unit of volatility. If you would invest  877.00  in Manitowoc on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Manitowoc or generate 1.37% return on investment over 90 days.

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

GreenPower Motor  vs.  Manitowoc

GreenPower Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenPower Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Manitowoc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manitowoc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Manitowoc is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with GreenPower and Manitowoc

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

The idea behind GreenPower Motor and Manitowoc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.