Correlation Between Global Environmental and Far East

Can any of the company-specific risk be diversified away by investing in both Global Environmental and Far East 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 Global Environmental and Far East into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Environmental Energy and Far East Wind, you can compare the effects of market volatilities on Global Environmental and Far East 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 Global Environmental with a short position of Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Environmental and Far East.

Diversification Opportunities for Global Environmental and Far East

0.06

Correlation Coefficient

Global Environmental  Far East

Significant diversification

The 3 months correlation between Global and Far is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global Environmental Energy and Far East Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Wind and Global Environmental 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 Global Environmental Energy are associated (or correlated) with Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Wind has no effect on the direction of Global Environmental i.e., Global Environmental and Far East go up and down completely randomly.

Pair Corralation between Global Environmental and Far East

If you would invest  0.01  in Global Environmental Energy on October 7, 2025 and sell it today you would earn a total of  0.00  from holding Global Environmental Energy or generate 0.0% return on investment over 90 days.

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

Global Environmental Energy  vs.  Far East Wind

Global Environmental

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Environmental Energy are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Global Environmental reported solid returns over the last few months and may actually be approaching a breakup point.

Far East Wind

Risk-Adjusted Performance

Weakest

Over the last 90 days Far East Wind has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Far East is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Global Environmental and Far East

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

The idea behind Global Environmental Energy and Far East Wind 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..