Correlation Between GreenPower and Stantec

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both GreenPower and Stantec 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 Stantec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Stantec, you can compare the effects of market volatilities on GreenPower and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Stantec.

Diversification Opportunities for GreenPower and Stantec

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between GreenPower and Stantec is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of GreenPower i.e., GreenPower and Stantec go up and down completely randomly.

Pair Corralation between GreenPower and Stantec

Assuming the 90 days horizon GreenPower Motor is expected to generate 5.63 times more return on investment than Stantec. However, GreenPower is 5.63 times more volatile than Stantec. It trades about 0.06 of its potential returns per unit of risk. Stantec is currently generating about 0.13 per unit of risk. If you would invest  123.00  in GreenPower Motor on September 3, 2024 and sell it today you would earn a total of  17.00  from holding GreenPower Motor or generate 13.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

GreenPower Motor  vs.  Stantec

 Performance 
       Timeline  
GreenPower Motor 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in GreenPower Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, GreenPower showed solid returns over the last few months and may actually be approaching a breakup point.
Stantec 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Stantec are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Stantec may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GreenPower and Stantec Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GreenPower and Stantec

The main advantage of trading using opposite GreenPower and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.
The idea behind GreenPower Motor and Stantec 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.
Check out your portfolio center.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance