Correlation Between FlexShares Global and GRNR

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

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

Diversification Opportunities for FlexShares Global and GRNR

0.0

Correlation Coefficient

FlexShares Global  GRNR

Pay attention - limited upside

The 3 months correlation between FlexShares and GRNR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares Global Quality and GRNR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRNR and FlexShares Global 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 FlexShares Global Quality are associated (or correlated) with GRNR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRNR has no effect on the direction of FlexShares Global i.e., FlexShares Global and GRNR go up and down completely randomly.

Pair Corralation between FlexShares Global and GRNR

If you would invest  5,661  in FlexShares Global Quality on December 20, 2024 and sell it today you would earn a total of  135.00  from holding FlexShares Global Quality or generate 2.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FlexShares Global Quality  vs.  GRNR

FlexShares Global Quality

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares Global Quality are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, FlexShares Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

GRNR

Risk-Adjusted Performance

Very Weak

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

Pair Trading with FlexShares Global and GRNR

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

The idea behind FlexShares Global Quality and GRNR 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.