Correlation Between Grey Cloak and City View

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

By analyzing existing cross correlation between Grey Cloak Tech and City View Green, you can compare the effects of market volatilities on Grey Cloak and City View 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 Grey Cloak with a short position of City View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grey Cloak and City View.

Diversification Opportunities for Grey Cloak and City View

-0.48

Correlation Coefficient

Grey Cloak  City View

Very good diversification

The 3 months correlation between Grey and City is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grey Cloak Tech and City View Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City View Green and Grey Cloak 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 Grey Cloak Tech are associated (or correlated) with City View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City View Green has no effect on the direction of Grey Cloak i.e., Grey Cloak and City View go up and down completely randomly.

Pair Corralation between Grey Cloak and City View

Given the investment horizon of 90 days Grey Cloak Tech is expected to under-perform the City View. But the otc stock apears to be less risky and, when comparing its historical volatility, Grey Cloak Tech is 1.92 times less risky than City View. The otc stock trades about -0.01 of its potential returns per unit of risk. The City View Green is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.26  in City View Green on December 27, 2024 and sell it today you would earn a total of  0.12  from holding City View Green or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Grey Cloak Tech  vs.  City View Green

Grey Cloak Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grey Cloak Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

City View Green

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in City View Green are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, City View reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grey Cloak and City View

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

The idea behind Grey Cloak Tech and City View Green 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.