Correlation Between MBIA and Greenhill

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

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

Diversification Opportunities for MBIA and Greenhill

0.0

Correlation Coefficient

MBIA  Greenhill

Pay attention - limited upside

The 3 months correlation between MBIA and Greenhill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MBIA Inc and Greenhill Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenhill and MBIA 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 MBIA Inc are associated (or correlated) with Greenhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenhill has no effect on the direction of MBIA i.e., MBIA and Greenhill go up and down completely randomly.

Pair Corralation between MBIA and Greenhill

If you would invest  354.00  in MBIA Inc on December 2, 2024 and sell it today you would earn a total of  253.00  from holding MBIA Inc or generate 71.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MBIA Inc  vs.  Greenhill Co

MBIA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days MBIA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, MBIA is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Greenhill

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenhill Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Greenhill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MBIA and Greenhill

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

The idea behind MBIA Inc and Greenhill Co 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.