Correlation Between NetSol Technologies and Greentown Management

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

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

Diversification Opportunities for NetSol Technologies and Greentown Management

-0.02

Correlation Coefficient

NetSol Technologies  Greentown Management

Good diversification

The 3 months correlation between NetSol and Greentown is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and Greentown Management Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentown Management and NetSol 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 NetSol Technologies are associated (or correlated) with Greentown Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentown Management has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and Greentown Management go up and down completely randomly.

Pair Corralation between NetSol Technologies and Greentown Management

Given the investment horizon of 90 days NetSol Technologies is expected to under-perform the Greentown Management. In addition to that, NetSol Technologies is 2.19 times more volatile than Greentown Management Holdings. It trades about -0.09 of its total potential returns per unit of risk. Greentown Management Holdings is currently generating about 0.12 per unit of volatility. If you would invest  46.00  in Greentown Management Holdings on October 7, 2024 and sell it today you would earn a total of  4.00  from holding Greentown Management Holdings or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

NetSol Technologies  vs.  Greentown Management Holdings

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with NetSol Technologies and Greentown Management

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

The idea behind NetSol Technologies and Greentown Management Holdings 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..