Correlation Between Greenlane Renewables and Eestech

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

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

Diversification Opportunities for Greenlane Renewables and Eestech

-0.22

Correlation Coefficient

Greenlane Renewables  Eestech

Very good diversification

The 3 months correlation between Greenlane and Eestech is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Renewables and Eestech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eestech and Greenlane Renewables 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 Greenlane Renewables are associated (or correlated) with Eestech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eestech has no effect on the direction of Greenlane Renewables i.e., Greenlane Renewables and Eestech go up and down completely randomly.

Pair Corralation between Greenlane Renewables and Eestech

Assuming the 90 days horizon Greenlane Renewables is expected to generate 0.86 times more return on investment than Eestech. However, Greenlane Renewables is 1.16 times less risky than Eestech. It trades about 0.09 of its potential returns per unit of risk. Eestech is currently generating about -0.12 per unit of risk. If you would invest  5.00  in Greenlane Renewables on September 12, 2024 and sell it today you would earn a total of  1.80  from holding Greenlane Renewables or generate 36.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Greenlane Renewables  vs.  Eestech

Greenlane Renewables

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenlane Renewables are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Greenlane Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Eestech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eestech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Greenlane Renewables and Eestech

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

The idea behind Greenlane Renewables and Eestech 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.