Correlation Between Green Shift and Granite Creek

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

By analyzing existing cross correlation between Green Shift Commodities and Granite Creek Copper, you can compare the effects of market volatilities on Green Shift and Granite Creek 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 Shift with a short position of Granite Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Shift and Granite Creek.

Diversification Opportunities for Green Shift and Granite Creek

-0.18

Correlation Coefficient

Green Shift  Granite Creek

Good diversification

The 3 months correlation between Green and Granite is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Green Shift Commodities and Granite Creek Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Creek Copper and Green Shift 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 Shift Commodities are associated (or correlated) with Granite Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Creek Copper has no effect on the direction of Green Shift i.e., Green Shift and Granite Creek go up and down completely randomly.

Pair Corralation between Green Shift and Granite Creek

Assuming the 90 days horizon Green Shift is expected to generate 2.07 times less return on investment than Granite Creek. In addition to that, Green Shift is 1.43 times more volatile than Granite Creek Copper. It trades about 0.02 of its total potential returns per unit of risk. Granite Creek Copper is currently generating about 0.05 per unit of volatility. If you would invest  1.43  in Granite Creek Copper on December 29, 2024 and sell it today you would earn a total of  0.07  from holding Granite Creek Copper or generate 4.9% return on investment over 90 days.

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

Green Shift Commodities  vs.  Granite Creek Copper

Green Shift Commodities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Green Shift Commodities are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Green Shift may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Granite Creek Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Creek Copper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Granite Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Green Shift and Granite Creek

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

The idea behind Green Shift Commodities and Granite Creek Copper 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.