Correlation Between Greenway Technologies and Petrofac

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

By analyzing existing cross correlation between Greenway Technologies and Petrofac Ltd ADR, you can compare the effects of market volatilities on Greenway Technologies and Petrofac 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 Greenway Technologies with a short position of Petrofac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenway Technologies and Petrofac.

Diversification Opportunities for Greenway Technologies and Petrofac

-0.58

Correlation Coefficient

Greenway Technologies  Petrofac

Excellent diversification

The 3 months correlation between Greenway and Petrofac is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Greenway Technologies and Petrofac Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrofac ADR and Greenway Technologies 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 Greenway Technologies are associated (or correlated) with Petrofac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrofac ADR has no effect on the direction of Greenway Technologies i.e., Greenway Technologies and Petrofac go up and down completely randomly.

Pair Corralation between Greenway Technologies and Petrofac

Given the investment horizon of 90 days Greenway Technologies is expected to generate 13.19 times more return on investment than Petrofac. However, Greenway Technologies is 13.19 times more volatile than Petrofac Ltd ADR. It trades about 0.13 of its potential returns per unit of risk. Petrofac Ltd ADR is currently generating about 0.02 per unit of risk. If you would invest  1.00  in Greenway Technologies on September 29, 2024 and sell it today you would earn a total of  3.00  from holding Greenway Technologies or generate 300.0% return on investment over 90 days.

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

Greenway Technologies  vs.  Petrofac Ltd ADR

Greenway Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenway Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Greenway Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Petrofac ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Petrofac Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Greenway Technologies and Petrofac

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

The idea behind Greenway Technologies and Petrofac Ltd ADR 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..