Correlation Between GREENWICH ASSET and VFD GROUP

Can any of the company-specific risk be diversified away by investing in both GREENWICH ASSET and VFD GROUP 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 VFD GROUP 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 VFD GROUP, you can compare the effects of market volatilities on GREENWICH ASSET and VFD GROUP 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 VFD GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENWICH ASSET and VFD GROUP.

Diversification Opportunities for GREENWICH ASSET and VFD GROUP

0.54

Correlation Coefficient

GREENWICH ASSET  VFD GROUP

Very weak diversification

The 3 months correlation between GREENWICH and VFD is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GREENWICH ASSET ETF and VFD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VFD GROUP 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 VFD GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VFD GROUP has no effect on the direction of GREENWICH ASSET i.e., GREENWICH ASSET and VFD GROUP go up and down completely randomly.

Pair Corralation between GREENWICH ASSET and VFD GROUP

Assuming the 90 days trading horizon GREENWICH ASSET ETF is expected to under-perform the VFD GROUP. In addition to that, GREENWICH ASSET is 2.01 times more volatile than VFD GROUP. It trades about -0.14 of its total potential returns per unit of risk. VFD GROUP is currently generating about 0.0 per unit of volatility. If you would invest  4,500  in VFD GROUP on September 12, 2024 and sell it today you would lose (50.00) from holding VFD GROUP or give up 1.11% of portfolio value over 90 days.

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

GREENWICH ASSET ETF  vs.  VFD GROUP

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 uncertain 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.

VFD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VFD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VFD GROUP is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GREENWICH ASSET and VFD GROUP

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

The idea behind GREENWICH ASSET ETF and VFD GROUP 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.