Correlation Between General Dynamics and GreenPro Capital

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

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

Diversification Opportunities for General Dynamics and GreenPro Capital

-0.06

Correlation Coefficient

General Dynamics  GreenPro Capital

Good diversification

The 3 months correlation between General and GreenPro is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding General Dynamics and GreenPro Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPro Capital Corp and General Dynamics 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 General Dynamics are associated (or correlated) with GreenPro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPro Capital Corp has no effect on the direction of General Dynamics i.e., General Dynamics and GreenPro Capital go up and down completely randomly.

Pair Corralation between General Dynamics and GreenPro Capital

Allowing for the 90-day total investment horizon General Dynamics is expected to generate 1.57 times less return on investment than GreenPro Capital. But when comparing it to its historical volatility, General Dynamics is 5.77 times less risky than GreenPro Capital. It trades about 0.03 of its potential returns per unit of risk. GreenPro Capital Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  106.00  in GreenPro Capital Corp on December 27, 2024 and sell it today you would lose (16.00) from holding GreenPro Capital Corp or give up 15.09% of portfolio value over 90 days.

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

General Dynamics  vs.  GreenPro Capital Corp

General Dynamics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in General Dynamics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, General Dynamics is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

GreenPro Capital Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenPro Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GreenPro Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with General Dynamics and GreenPro Capital

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

The idea behind General Dynamics and GreenPro Capital Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.