Correlation Between Arrow Greentech and 360 ONE

Can any of the company-specific risk be diversified away by investing in both Arrow Greentech and 360 ONE 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 Arrow Greentech and 360 ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arrow Greentech Limited and 360 ONE WAM, you can compare the effects of market volatilities on Arrow Greentech and 360 ONE 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 Arrow Greentech with a short position of 360 ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Greentech and 360 ONE.

Diversification Opportunities for Arrow Greentech and 360 ONE

0.79

Correlation Coefficient

Arrow Greentech  360 ONE

Poor diversification

The 3 months correlation between Arrow and 360 is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Greentech Limited and 360 ONE WAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 ONE WAM and Arrow Greentech 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 Arrow Greentech Limited are associated (or correlated) with 360 ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 ONE WAM has no effect on the direction of Arrow Greentech i.e., Arrow Greentech and 360 ONE go up and down completely randomly.

Pair Corralation between Arrow Greentech and 360 ONE

Assuming the 90 days trading horizon Arrow Greentech Limited is expected to under-perform the 360 ONE. In addition to that, Arrow Greentech is 1.28 times more volatile than 360 ONE WAM. It trades about -0.29 of its total potential returns per unit of risk. 360 ONE WAM is currently generating about -0.15 per unit of volatility. If you would invest  99,185  in 360 ONE WAM on December 10, 2024 and sell it today you would lose (9,645) from holding 360 ONE WAM or give up 9.72% of portfolio value over 90 days.

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

Arrow Greentech Limited  vs.  360 ONE WAM

Arrow Greentech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arrow Greentech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

360 ONE WAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days 360 ONE WAM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Arrow Greentech and 360 ONE

The main advantage of trading using opposite Arrow Greentech and 360 ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Greentech position performs unexpectedly, 360 ONE 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 360 ONE will offset losses from the drop in 360 ONE's long position.

The idea behind Arrow Greentech Limited and 360 ONE WAM 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.