Correlation Between GREENWICH ASSET and TRANS NATIONWIDE

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

By analyzing existing cross correlation between GREENWICH ASSET ETF and TRANS NATIONWIDE EXPRESS PLC, you can compare the effects of market volatilities on GREENWICH ASSET and TRANS NATIONWIDE 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 GREENWICH ASSET with a short position of TRANS NATIONWIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENWICH ASSET and TRANS NATIONWIDE.

Diversification Opportunities for GREENWICH ASSET and TRANS NATIONWIDE

-0.52

Correlation Coefficient

GREENWICH ASSET  TRANS NATIONWIDE

Excellent diversification

The 3 months correlation between GREENWICH and TRANS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding GREENWICH ASSET ETF and TRANS NATIONWIDE EXPRESS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANS NATIONWIDE EXP and GREENWICH ASSET 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 GREENWICH ASSET ETF are associated (or correlated) with TRANS NATIONWIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANS NATIONWIDE EXP has no effect on the direction of GREENWICH ASSET i.e., GREENWICH ASSET and TRANS NATIONWIDE go up and down completely randomly.

Pair Corralation between GREENWICH ASSET and TRANS NATIONWIDE

Assuming the 90 days trading horizon GREENWICH ASSET ETF is expected to under-perform the TRANS NATIONWIDE. In addition to that, GREENWICH ASSET is 1.8 times more volatile than TRANS NATIONWIDE EXPRESS PLC. It trades about -0.12 of its total potential returns per unit of risk. TRANS NATIONWIDE EXPRESS PLC is currently generating about 0.27 per unit of volatility. If you would invest  123.00  in TRANS NATIONWIDE EXPRESS PLC on September 28, 2024 and sell it today you would earn a total of  15.00  from holding TRANS NATIONWIDE EXPRESS PLC or generate 12.2% return on investment over 90 days.

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

GREENWICH ASSET ETF  vs.  TRANS NATIONWIDE EXPRESS PLC

GREENWICH ASSET ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENWICH ASSET ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

TRANS NATIONWIDE EXP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRANS NATIONWIDE EXPRESS PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, TRANS NATIONWIDE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GREENWICH ASSET and TRANS NATIONWIDE

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

The idea behind GREENWICH ASSET ETF and TRANS NATIONWIDE EXPRESS PLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.