Correlation Between GreenPower and DevvStream Corp

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

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

Diversification Opportunities for GreenPower and DevvStream Corp

0.92

Correlation Coefficient

GreenPower  DevvStream Corp

Almost no diversification

The 3 months correlation between GreenPower and DevvStream is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and DevvStream Corp Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevvStream Corp Common 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 DevvStream Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevvStream Corp Common has no effect on the direction of GreenPower i.e., GreenPower and DevvStream Corp go up and down completely randomly.

Pair Corralation between GreenPower and DevvStream Corp

Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 0.3 times more return on investment than DevvStream Corp. However, GreenPower Motor is 3.35 times less risky than DevvStream Corp. It trades about -0.11 of its potential returns per unit of risk. DevvStream Corp Common is currently generating about -0.05 per unit of risk. If you would invest  133.00  in GreenPower Motor on September 19, 2024 and sell it today you would lose (57.51) from holding GreenPower Motor or give up 43.24% of portfolio value over 90 days.

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

GreenPower Motor  vs.  DevvStream Corp Common

GreenPower Motor

Risk-Adjusted Performance

0 of 100

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 abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

DevvStream Corp Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DevvStream Corp Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GreenPower and DevvStream Corp

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

The idea behind GreenPower Motor and DevvStream Corp Common 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.