Correlation Between GreenPower and Blue Bird
Can any of the company-specific risk be diversified away by investing in both GreenPower and Blue Bird 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 GreenPower and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Blue Bird Corp, you can compare the effects of market volatilities on GreenPower and Blue Bird 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 GreenPower with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Blue Bird.
Diversification Opportunities for GreenPower and Blue Bird
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GreenPower and Blue is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp and GreenPower 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 GreenPower Motor are associated (or correlated) with Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of GreenPower i.e., GreenPower and Blue Bird go up and down completely randomly.
Pair Corralation between GreenPower and Blue Bird
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 1.17 times more return on investment than Blue Bird. However, GreenPower is 1.17 times more volatile than Blue Bird Corp. It trades about -0.03 of its potential returns per unit of risk. Blue Bird Corp is currently generating about -0.17 per unit of risk. If you would invest 192.00 in GreenPower Motor on January 31, 2024 and sell it today you would lose (6.00) from holding GreenPower Motor or give up 3.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GreenPower Motor vs. Blue Bird Corp
Performance |
Timeline |
GreenPower Motor |
Blue Bird Corp |
GreenPower and Blue Bird Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GreenPower and Blue Bird
The main advantage of trading using opposite GreenPower and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.GreenPower vs. AGCO Corporation | GreenPower vs. CNH Industrial NV | GreenPower vs. Deere Company | GreenPower vs. Lindsay |
Blue Bird vs. Vicinity Motor Corp | Blue Bird vs. AYRO Inc | Blue Bird vs. Canoo Inc | Blue Bird vs. Hyzon Motors |
Check out your portfolio center.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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