Correlation Between Greenhill and SAI Old

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

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

Diversification Opportunities for Greenhill and SAI Old

0.18

Correlation Coefficient

Greenhill  SAI Old

Average diversification

The 3 months correlation between Greenhill and SAI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Greenhill Co and SAI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAI Old and Greenhill 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 Greenhill Co are associated (or correlated) with SAI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAI Old has no effect on the direction of Greenhill i.e., Greenhill and SAI Old go up and down completely randomly.

Pair Corralation between Greenhill and SAI Old

If you would invest  117.00  in SAI Old on October 10, 2024 and sell it today you would earn a total of  0.00  from holding SAI Old or generate 0.0% return on investment over 90 days.

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

Greenhill Co  vs.  SAI Old

Greenhill

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenhill Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Greenhill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

SAI Old

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days SAI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak basic indicators, SAI Old demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenhill and SAI Old

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

The idea behind Greenhill Co and SAI Old 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.