Correlation Between GreenPower and Synex International

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

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

Diversification Opportunities for GreenPower and Synex International

0.27

Correlation Coefficient

GreenPower  Synex International

Modest diversification

The 3 months correlation between GreenPower and Synex is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Synex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synex International 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 Synex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synex International has no effect on the direction of GreenPower i.e., GreenPower and Synex International go up and down completely randomly.

Pair Corralation between GreenPower and Synex International

Assuming the 90 days horizon GreenPower Motor is expected to under-perform the Synex International. In addition to that, GreenPower is 1.02 times more volatile than Synex International. It trades about -0.07 of its total potential returns per unit of risk. Synex International is currently generating about 0.1 per unit of volatility. If you would invest  170.00  in Synex International on December 30, 2024 and sell it today you would earn a total of  61.00  from holding Synex International or generate 35.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GreenPower Motor  vs.  Synex International

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. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Synex International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Synex International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Synex International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenPower and Synex International

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

The idea behind GreenPower Motor and Synex 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.