Correlation Between Greentown Management and ATRenew

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

By analyzing existing cross correlation between Greentown Management Holdings and ATRenew Inc DRC, you can compare the effects of market volatilities on Greentown Management and ATRenew 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 Greentown Management with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentown Management and ATRenew.

Diversification Opportunities for Greentown Management and ATRenew

-0.05

Correlation Coefficient

Greentown Management  ATRenew

Good diversification

The 3 months correlation between Greentown and ATRenew is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Greentown Management Holdings and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Greentown Management 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 Greentown Management Holdings are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Greentown Management i.e., Greentown Management and ATRenew go up and down completely randomly.

Pair Corralation between Greentown Management and ATRenew

If you would invest  244.00  in ATRenew Inc DRC on October 7, 2024 and sell it today you would earn a total of  31.00  from holding ATRenew Inc DRC or generate 12.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.35%
Values	Daily Returns

Greentown Management Holdings  vs.  ATRenew Inc DRC

Greentown Management

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greentown Management Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Greentown Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ATRenew Inc DRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRenew Inc DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ATRenew is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Greentown Management and ATRenew

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

The idea behind Greentown Management Holdings and ATRenew Inc DRC 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.