Correlation Between Via Renewables and Greenidge Generation

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

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

Diversification Opportunities for Via Renewables and Greenidge Generation

-0.25

Correlation Coefficient

Via Renewables  Greenidge Generation

Very good diversification

The 3 months correlation between Via and Greenidge is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Greenidge Generation Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenidge Generation and Via 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 Via Renewables are associated (or correlated) with Greenidge Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenidge Generation has no effect on the direction of Via Renewables i.e., Via Renewables and Greenidge Generation go up and down completely randomly.

Pair Corralation between Via Renewables and Greenidge Generation

Assuming the 90 days horizon Via Renewables is expected to generate 0.38 times more return on investment than Greenidge Generation. However, Via Renewables is 2.62 times less risky than Greenidge Generation. It trades about 0.03 of its potential returns per unit of risk. Greenidge Generation Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,780  in Via Renewables on October 4, 2024 and sell it today you would earn a total of  525.00  from holding Via Renewables or generate 29.49% return on investment over 90 days.

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

Via Renewables  vs.  Greenidge Generation Holdings

Via Renewables

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Greenidge Generation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenidge Generation Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Via Renewables and Greenidge Generation

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

The idea behind Via Renewables and Greenidge Generation Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.