Correlation Between Roma Green and GreenPro Capital

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

By analyzing existing cross correlation between Roma Green Finance and GreenPro Capital Corp, you can compare the effects of market volatilities on Roma Green and GreenPro 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 Roma Green with a short position of GreenPro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roma Green and GreenPro Capital.

Diversification Opportunities for Roma Green and GreenPro Capital

-0.72

Correlation Coefficient

Roma Green  GreenPro Capital

Pay attention - limited upside

The 3 months correlation between Roma and GreenPro is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Roma Green Finance and GreenPro Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPro Capital Corp and Roma Green 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 Roma Green Finance are associated (or correlated) with GreenPro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPro Capital Corp has no effect on the direction of Roma Green i.e., Roma Green and GreenPro Capital go up and down completely randomly.

Pair Corralation between Roma Green and GreenPro Capital

Given the investment horizon of 90 days Roma Green is expected to generate 46.7 times less return on investment than GreenPro Capital. But when comparing it to its historical volatility, Roma Green Finance is 1.5 times less risky than GreenPro Capital. It trades about 0.0 of its potential returns per unit of risk. GreenPro Capital Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  92.00  in GreenPro Capital Corp on October 4, 2024 and sell it today you would earn a total of  19.00  from holding GreenPro Capital Corp or generate 20.65% return on investment over 90 days.

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

Roma Green Finance  vs.  GreenPro Capital Corp

Roma Green Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roma Green Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Roma Green is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

GreenPro Capital Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPro Capital Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenPro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roma Green and GreenPro Capital

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

The idea behind Roma Green Finance and GreenPro Capital Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..