Correlation Between GreenPower and Custom Truck

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

By analyzing existing cross correlation between GreenPower Motor and Custom Truck One, you can compare the effects of market volatilities on GreenPower and Custom Truck 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 Custom Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Custom Truck.

Diversification Opportunities for GreenPower and Custom Truck

-0.57

Correlation Coefficient

GreenPower  Custom Truck

Excellent diversification

The 3 months correlation between GreenPower and Custom is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Custom Truck One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custom Truck One 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 Custom Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custom Truck One has no effect on the direction of GreenPower i.e., GreenPower and Custom Truck go up and down completely randomly.

Pair Corralation between GreenPower and Custom Truck

Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Custom Truck. In addition to that, GreenPower is 1.19 times more volatile than Custom Truck One. It trades about -0.08 of its total potential returns per unit of risk. Custom Truck One is currently generating about 0.27 per unit of volatility. If you would invest  403.00  in Custom Truck One on April 30, 2025 and sell it today you would earn a total of  192.00  from holding Custom Truck One or generate 47.64% return on investment over 90 days.

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

GreenPower Motor  vs.  Custom Truck One

GreenPower Motor

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenPower Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Custom Truck One

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Custom Truck One are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Custom Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenPower and Custom Truck

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

The idea behind GreenPower Motor and Custom Truck One 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.