Correlation Between Greenshift Corp and Weir Group

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

By analyzing existing cross correlation between Greenshift Corp and Weir Group PLC, you can compare the effects of market volatilities on Greenshift Corp and Weir Group 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 Greenshift Corp with a short position of Weir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenshift Corp and Weir Group.

Diversification Opportunities for Greenshift Corp and Weir Group

-0.2

Correlation Coefficient

Greenshift Corp  Weir Group

Good diversification

The 3 months correlation between Greenshift and Weir is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Greenshift Corp and Weir Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group PLC and Greenshift Corp 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 Greenshift Corp are associated (or correlated) with Weir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group PLC has no effect on the direction of Greenshift Corp i.e., Greenshift Corp and Weir Group go up and down completely randomly.

Pair Corralation between Greenshift Corp and Weir Group

Given the investment horizon of 90 days Greenshift Corp is expected to generate 5.43 times more return on investment than Weir Group. However, Greenshift Corp is 5.43 times more volatile than Weir Group PLC. It trades about 0.02 of its potential returns per unit of risk. Weir Group PLC is currently generating about 0.08 per unit of risk. If you would invest  3.50  in Greenshift Corp on September 5, 2024 and sell it today you would lose (0.70) from holding Greenshift Corp or give up 20.0% of portfolio value over 90 days.

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

Greenshift Corp  vs.  Weir Group PLC

Greenshift Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenshift Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Greenshift Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Weir Group PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weir Group PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Weir Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Greenshift Corp and Weir Group

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

The idea behind Greenshift Corp and Weir Group PLC 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.