Correlation Between Colas SA and Greenlight Capital

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

By analyzing existing cross correlation between Colas SA and Greenlight Capital Re, you can compare the effects of market volatilities on Colas SA and Greenlight Capital 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 Colas SA with a short position of Greenlight Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colas SA and Greenlight Capital.

Diversification Opportunities for Colas SA and Greenlight Capital

0.0

Correlation Coefficient

Colas SA  Greenlight Capital

Pay attention - limited upside

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

Pair Corralation between Colas SA and Greenlight Capital

If you would invest (100.00) in Colas SA on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Colas SA or generate -100.0% return on investment over 90 days.

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

Colas SA  vs.  Greenlight Capital Re

Colas SA

Risk-Adjusted Performance

Very Weak

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

Greenlight Capital

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Colas SA and Greenlight Capital

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

The idea behind Colas SA and Greenlight Capital Re 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.