Correlation Between Greenland Acquisition and Twin Disc

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

By analyzing existing cross correlation between Greenland Acquisition Corp and Twin Disc Incorporated, you can compare the effects of market volatilities on Greenland Acquisition and Twin Disc 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 Greenland Acquisition with a short position of Twin Disc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Acquisition and Twin Disc.

Diversification Opportunities for Greenland Acquisition and Twin Disc

-0.22

Correlation Coefficient

Greenland Acquisition  Twin Disc

Very good diversification

The 3 months correlation between Greenland and Twin is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp and Twin Disc Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Disc and Greenland Acquisition 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 Greenland Acquisition Corp are associated (or correlated) with Twin Disc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Disc has no effect on the direction of Greenland Acquisition i.e., Greenland Acquisition and Twin Disc go up and down completely randomly.

Pair Corralation between Greenland Acquisition and Twin Disc

Given the investment horizon of 90 days Greenland Acquisition Corp is expected to generate 2.0 times more return on investment than Twin Disc. However, Greenland Acquisition is 2.0 times more volatile than Twin Disc Incorporated. It trades about 0.03 of its potential returns per unit of risk. Twin Disc Incorporated is currently generating about 0.02 per unit of risk. If you would invest  201.00  in Greenland Acquisition Corp on August 31, 2024 and sell it today you would earn a total of  3.00  from holding Greenland Acquisition Corp or generate 1.49% return on investment over 90 days.

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

Greenland Acquisition Corp  vs.  Twin Disc Incorporated

Greenland Acquisition

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenland Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Greenland Acquisition may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Twin Disc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Twin Disc Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Twin Disc is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Greenland Acquisition and Twin Disc

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

The idea behind Greenland Acquisition Corp and Twin Disc Incorporated 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.