Correlation Between Green World and Est Global

Can any of the company-specific risk be diversified away by investing in both Green World and Est Global 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 Est Global 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 Est Global Apparel, you can compare the effects of market volatilities on Green World and Est Global 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 Est Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green World and Est Global.

Diversification Opportunities for Green World and Est Global

-0.35

Correlation Coefficient

Green World  Est Global

Very good diversification

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

Pair Corralation between Green World and Est Global

Assuming the 90 days trading horizon Green World Fintech is expected to under-perform the Est Global. But the stock apears to be less risky and, when comparing its historical volatility, Green World Fintech is 1.75 times less risky than Est Global. The stock trades about -0.32 of its potential returns per unit of risk. The Est Global Apparel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,735  in Est Global Apparel on September 18, 2024 and sell it today you would earn a total of  20.00  from holding Est Global Apparel or generate 1.15% return on investment over 90 days.

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

Green World Fintech  vs.  Est Global Apparel

Green World Fintech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green World Fintech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Green World showed solid returns over the last few months and may actually be approaching a breakup point.

Est Global Apparel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Est Global Apparel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Est Global 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 Est Global

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

The idea behind Green World Fintech and Est Global Apparel 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 Stocks Directory module to find actively traded stocks across global markets.