Correlation Between Greenidge Generation and Visa

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

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

Diversification Opportunities for Greenidge Generation and Visa

0.61

Correlation Coefficient

Greenidge Generation  Visa

Poor diversification

The 3 months correlation between Greenidge and Visa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Greenidge Generation Holdings and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and Greenidge Generation 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 Greenidge Generation Holdings are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Greenidge Generation i.e., Greenidge Generation and Visa go up and down completely randomly.

Pair Corralation between Greenidge Generation and Visa

Given the investment horizon of 90 days Greenidge Generation Holdings is expected to generate 5.06 times more return on investment than Visa. However, Greenidge Generation is 5.06 times more volatile than Visa Class A. It trades about 0.11 of its potential returns per unit of risk. Visa Class A is currently generating about 0.16 per unit of risk. If you would invest  177.00  in Greenidge Generation Holdings on September 2, 2024 and sell it today you would earn a total of  64.00  from holding Greenidge Generation Holdings or generate 36.16% return on investment over 90 days.

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

Greenidge Generation Holdings  vs.  Visa Class A

Greenidge Generation

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenidge Generation Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Greenidge Generation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Visa Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenidge Generation and Visa

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

The idea behind Greenidge Generation Holdings and Visa Class A 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.