Correlation Between GREENWICH ASSET and VETIVA S

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

Diversification Opportunities for GREENWICH ASSET and VETIVA S

-0.23

Correlation Coefficient

GREENWICH ASSET  VETIVA S

Very good diversification

The 3 months correlation between GREENWICH and VETIVA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GREENWICH ASSET ETF and VETIVA S P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VETIVA S P 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 VETIVA S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VETIVA S P has no effect on the direction of GREENWICH ASSET i.e., GREENWICH ASSET and VETIVA S go up and down completely randomly.

Pair Corralation between GREENWICH ASSET and VETIVA S

Assuming the 90 days trading horizon GREENWICH ASSET ETF is expected to generate 0.46 times more return on investment than VETIVA S. However, GREENWICH ASSET ETF is 2.18 times less risky than VETIVA S. It trades about 0.01 of its potential returns per unit of risk. VETIVA S P is currently generating about -0.01 per unit of risk. If you would invest  53,000  in GREENWICH ASSET ETF on December 2, 2024 and sell it today you would lose (135.00) from holding GREENWICH ASSET ETF or give up 0.25% of portfolio value over 90 days.

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

GREENWICH ASSET ETF  vs.  VETIVA S P

GREENWICH ASSET ETF

Risk-Adjusted Performance

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 rather sound basic indicators, GREENWICH ASSET is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

VETIVA S P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VETIVA S P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, VETIVA S exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GREENWICH ASSET and VETIVA S

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

The idea behind GREENWICH ASSET ETF and VETIVA S P 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.