Correlation Between Turning Point and Green Globe

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

By analyzing existing cross correlation between Turning Point Brands and Green Globe International, you can compare the effects of market volatilities on Turning Point and Green Globe 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 Turning Point with a short position of Green Globe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Green Globe.

Diversification Opportunities for Turning Point and Green Globe

-0.49

Correlation Coefficient

Turning Point  Green Globe

Very good diversification

The 3 months correlation between Turning and Green is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Green Globe International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Globe International and Turning Point 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 Turning Point Brands are associated (or correlated) with Green Globe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Globe International has no effect on the direction of Turning Point i.e., Turning Point and Green Globe go up and down completely randomly.

Pair Corralation between Turning Point and Green Globe

Considering the 90-day investment horizon Turning Point is expected to generate 849.67 times less return on investment than Green Globe. But when comparing it to its historical volatility, Turning Point Brands is 18.82 times less risky than Green Globe. It trades about 0.0 of its potential returns per unit of risk. Green Globe International is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Green Globe International on December 28, 2024 and sell it today you would lose (0.02) from holding Green Globe International or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Turning Point Brands  vs.  Green Globe International

Turning Point Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turning Point Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Turning Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Green Globe International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Green Globe International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting forward indicators, Green Globe demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Turning Point and Green Globe

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

The idea behind Turning Point Brands and Green Globe International 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..