Correlation Between Green Cures and Ipsen SA
Can any of the company-specific risk be diversified away by investing in both Green Cures and Ipsen SA 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 Green Cures and Ipsen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cures Botanical and Ipsen SA, you can compare the effects of market volatilities on Green Cures and Ipsen SA 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 Green Cures with a short position of Ipsen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cures and Ipsen SA.
Diversification Opportunities for Green Cures and Ipsen SA
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Green and Ipsen is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Green Cures Botanical and Ipsen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsen SA and Green Cures 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 Green Cures Botanical are associated (or correlated) with Ipsen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsen SA has no effect on the direction of Green Cures i.e., Green Cures and Ipsen SA go up and down completely randomly.
Pair Corralation between Green Cures and Ipsen SA
Given the investment horizon of 90 days Green Cures Botanical is expected to generate 40.81 times more return on investment than Ipsen SA. However, Green Cures is 40.81 times more volatile than Ipsen SA. It trades about 0.15 of its potential returns per unit of risk. Ipsen SA is currently generating about 0.01 per unit of risk. If you would invest 0.05 in Green Cures Botanical on January 26, 2024 and sell it today you would lose (0.04) from holding Green Cures Botanical or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cures Botanical vs. Ipsen SA
Performance |
| Timeline |
| Green Cures Botanical |
| Ipsen SA |
Green Cures and Ipsen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cures and Ipsen SA
The main advantage of trading using opposite Green Cures and Ipsen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cures position performs unexpectedly, Ipsen SA 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 Ipsen SA will offset losses from the drop in Ipsen SA's long position.| Green Cures vs. Cann American Corp | Green Cures vs. Rimrock Gold Corp | Green Cures vs. Indoor Harvest Corp | Green Cures vs. GelStat Corp |
| Ipsen SA vs. Taro Pharmaceutical Industries | Ipsen SA vs. Esperion Therapeutics | Ipsen SA vs. Durect | Ipsen SA vs. Lucy Scientific Discovery |
Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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