Correlation Between GreenPower and Transcat
Can any of the company-specific risk be diversified away by investing in both GreenPower and Transcat 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 Transcat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Transcat, you can compare the effects of market volatilities on GreenPower and Transcat 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 Transcat. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Transcat.
Diversification Opportunities for GreenPower and Transcat
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenPower and Transcat is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Transcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcat 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 Transcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcat has no effect on the direction of GreenPower i.e., GreenPower and Transcat go up and down completely randomly.
Pair Corralation between GreenPower and Transcat
Allowing for the 90-day total investment horizon GreenPower Motor is expected to under-perform the Transcat. In addition to that, GreenPower is 1.05 times more volatile than Transcat. It trades about -0.14 of its total potential returns per unit of risk. Transcat is currently generating about 0.1 per unit of volatility. If you would invest 6,907 in Transcat on March 21, 2025 and sell it today you would earn a total of 1,202 from holding Transcat or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Transcat
Performance |
| Timeline |
| GreenPower Motor |
| Transcat |
GreenPower and Transcat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Transcat
The main advantage of trading using opposite GreenPower and Transcat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Transcat 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 Transcat will offset losses from the drop in Transcat's long position.| GreenPower vs. Deere Company | GreenPower vs. Hyster Yale Materials Handling | GreenPower vs. CNH Industrial NV | GreenPower vs. Lindsay |
| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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