Correlation Between Envestnet and Green Dot

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

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

Diversification Opportunities for Envestnet and Green Dot

-0.45

Correlation Coefficient

Envestnet  Green Dot

Very good diversification

The 3 months correlation between Envestnet and Green is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Envestnet and Green Dot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Dot and Envestnet 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 Envestnet are associated (or correlated) with Green Dot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Dot has no effect on the direction of Envestnet i.e., Envestnet and Green Dot go up and down completely randomly.

Pair Corralation between Envestnet and Green Dot

Considering the 90-day investment horizon Envestnet is expected to generate 0.03 times more return on investment than Green Dot. However, Envestnet is 38.91 times less risky than Green Dot. It trades about 0.08 of its potential returns per unit of risk. Green Dot is currently generating about 0.0 per unit of risk. If you would invest  6,283  in Envestnet on September 2, 2024 and sell it today you would earn a total of  31.00  from holding Envestnet or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Envestnet  vs.  Green Dot

Envestnet

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Envestnet are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Envestnet is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Green Dot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Dot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Green Dot is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Envestnet and Green Dot

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

The idea behind Envestnet and Green Dot 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.