Correlation Between Green Leaf and Baylin Technologies

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

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

Diversification Opportunities for Green Leaf and Baylin Technologies

0.17

Correlation Coefficient

Green Leaf  Baylin Technologies

Average diversification

The 3 months correlation between Green and Baylin is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Green Leaf Innovations and Baylin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baylin Technologies and Green Leaf 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 Leaf Innovations are associated (or correlated) with Baylin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baylin Technologies has no effect on the direction of Green Leaf i.e., Green Leaf and Baylin Technologies go up and down completely randomly.

Pair Corralation between Green Leaf and Baylin Technologies

Given the investment horizon of 90 days Green Leaf Innovations is expected to generate 34.78 times more return on investment than Baylin Technologies. However, Green Leaf is 34.78 times more volatile than Baylin Technologies. It trades about 0.15 of its potential returns per unit of risk. Baylin Technologies is currently generating about -0.22 per unit of risk. If you would invest  0.01  in Green Leaf Innovations on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Green Leaf Innovations or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Green Leaf Innovations  vs.  Baylin Technologies

Green Leaf Innovations

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Leaf Innovations are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal essential indicators, Green Leaf reported solid returns over the last few months and may actually be approaching a breakup point.

Baylin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baylin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Green Leaf and Baylin Technologies

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

The idea behind Green Leaf Innovations and Baylin Technologies 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 Global Correlations module to find global opportunities by holding instruments from different markets.