Correlation Between ITM Power and Greenland Technologies

Can any of the company-specific risk be diversified away by investing in both ITM Power and Greenland 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 ITM Power and Greenland Technologies 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 Greenland Technologies Holding, you can compare the effects of market volatilities on ITM Power and Greenland 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 ITM Power with a short position of Greenland Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Power and Greenland Technologies.

Diversification Opportunities for ITM Power and Greenland Technologies

0.0

Correlation Coefficient

ITM Power  Greenland Technologies

Pay attention - limited upside

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

Pair Corralation between ITM Power and Greenland Technologies

If you would invest (100.00) in Greenland Technologies Holding on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Greenland Technologies Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ITM Power Plc  vs.  Greenland Technologies Holding

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.

Greenland Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenland Technologies Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Greenland Technologies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with ITM Power and Greenland Technologies

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

The idea behind ITM Power Plc and Greenland Technologies Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.