Correlation Between Greengro Tech and Rev

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

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

Diversification Opportunities for Greengro Tech and Rev

0.0

Correlation Coefficient

Greengro Tech  Rev

Pay attention - limited upside

The 3 months correlation between Greengro and Rev is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Greengro Tech and Rev Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rev Group and Greengro Tech 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 Greengro Tech are associated (or correlated) with Rev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rev Group has no effect on the direction of Greengro Tech i.e., Greengro Tech and Rev go up and down completely randomly.

Pair Corralation between Greengro Tech and Rev

Given the investment horizon of 90 days Greengro Tech is expected to generate 38.8 times more return on investment than Rev. However, Greengro Tech is 38.8 times more volatile than Rev Group. It trades about 0.09 of its potential returns per unit of risk. Rev Group is currently generating about 0.1 per unit of risk. If you would invest  0.24  in Greengro Tech on September 13, 2024 and sell it today you would lose (0.24) from holding Greengro Tech or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Greengro Tech  vs.  Rev Group

Greengro Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greengro Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Greengro Tech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Rev Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rev Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Rev reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greengro Tech and Rev

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

The idea behind Greengro Tech and Rev Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.