Correlation Between ITM Power and Greenshift Corp

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

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

Diversification Opportunities for ITM Power and Greenshift Corp

0.35

Correlation Coefficient

ITM Power  Greenshift Corp

Weak diversification

The 3 months correlation between ITM and Greenshift is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ITM Power Plc and Greenshift Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenshift Corp and ITM Power 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 ITM Power Plc are associated (or correlated) with Greenshift Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenshift Corp has no effect on the direction of ITM Power i.e., ITM Power and Greenshift Corp go up and down completely randomly.

Pair Corralation between ITM Power and Greenshift Corp

Assuming the 90 days horizon ITM Power Plc is expected to under-perform the Greenshift Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, ITM Power Plc is 1.53 times less risky than Greenshift Corp. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Greenshift Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3.79  in Greenshift Corp on December 26, 2024 and sell it today you would lose (0.19) from holding Greenshift Corp or give up 5.01% of portfolio value over 90 days.

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

ITM Power Plc  vs.  Greenshift Corp

ITM Power Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITM Power Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Greenshift Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenshift Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Greenshift Corp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ITM Power and Greenshift Corp

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

The idea behind ITM Power Plc and Greenshift Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.