Correlation Between Greystone Logistics and Farmhouse

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

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

Diversification Opportunities for Greystone Logistics and Farmhouse

0.28

Correlation Coefficient

Greystone Logistics  Farmhouse

Modest diversification

The 3 months correlation between Greystone and Farmhouse is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Greystone Logistics and Farmhouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmhouse and Greystone Logistics 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 Greystone Logistics are associated (or correlated) with Farmhouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmhouse has no effect on the direction of Greystone Logistics i.e., Greystone Logistics and Farmhouse go up and down completely randomly.

Pair Corralation between Greystone Logistics and Farmhouse

Given the investment horizon of 90 days Greystone Logistics is expected to under-perform the Farmhouse. But the otc stock apears to be less risky and, when comparing its historical volatility, Greystone Logistics is 4.5 times less risky than Farmhouse. The otc stock trades about -0.12 of its potential returns per unit of risk. The Farmhouse is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Farmhouse on October 1, 2024 and sell it today you would lose (9.03) from holding Farmhouse or give up 56.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Greystone Logistics  vs.  Farmhouse

Greystone Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greystone Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Farmhouse

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farmhouse has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Farmhouse is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Greystone Logistics and Farmhouse

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

The idea behind Greystone Logistics and Farmhouse 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.