Correlation Between Greenlane Holdings and Universal

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

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

Diversification Opportunities for Greenlane Holdings and Universal

-0.63

Correlation Coefficient

Greenlane Holdings  Universal

Excellent diversification

The 3 months correlation between Greenlane and Universal is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Holdings and Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal and Greenlane Holdings 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 Greenlane Holdings are associated (or correlated) with Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal has no effect on the direction of Greenlane Holdings i.e., Greenlane Holdings and Universal go up and down completely randomly.

Pair Corralation between Greenlane Holdings and Universal

Given the investment horizon of 90 days Greenlane Holdings is expected to under-perform the Universal. In addition to that, Greenlane Holdings is 4.82 times more volatile than Universal. It trades about -0.36 of its total potential returns per unit of risk. Universal is currently generating about 0.06 per unit of volatility. If you would invest  5,348  in Universal on December 30, 2024 and sell it today you would earn a total of  256.00  from holding Universal or generate 4.79% return on investment over 90 days.

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

Greenlane Holdings  vs.  Universal

Greenlane Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenlane Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Universal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Universal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Universal 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 Greenlane Holdings and Universal

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

The idea behind Greenlane Holdings and Universal 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.

Check out your portfolio center.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.