Correlation Between Green World and Shuttle

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

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

Diversification Opportunities for Green World and Shuttle

0.35

Correlation Coefficient

Green World  Shuttle

Weak diversification

The 3 months correlation between Green and Shuttle is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Green World Fintech and Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle and Green World 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 World Fintech are associated (or correlated) with Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle has no effect on the direction of Green World i.e., Green World and Shuttle go up and down completely randomly.

Pair Corralation between Green World and Shuttle

Assuming the 90 days trading horizon Green World Fintech is expected to generate 1.85 times more return on investment than Shuttle. However, Green World is 1.85 times more volatile than Shuttle. It trades about 0.11 of its potential returns per unit of risk. Shuttle is currently generating about -0.01 per unit of risk. If you would invest  4,616  in Green World Fintech on October 18, 2024 and sell it today you would earn a total of  1,684  from holding Green World Fintech or generate 36.48% return on investment over 90 days.

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

Green World Fintech  vs.  Shuttle

Green World Fintech

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Green World Fintech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Green World is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Shuttle

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shuttle are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Shuttle is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Green World and Shuttle

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

The idea behind Green World Fintech and Shuttle 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.