Correlation Between TRANS NATIONWIDE and GREENWICH ASSET

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

By analyzing existing cross correlation between TRANS NATIONWIDE EXPRESS PLC and GREENWICH ASSET ETF, you can compare the effects of market volatilities on TRANS NATIONWIDE and GREENWICH ASSET 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 TRANS NATIONWIDE with a short position of GREENWICH ASSET. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRANS NATIONWIDE and GREENWICH ASSET.

Diversification Opportunities for TRANS NATIONWIDE and GREENWICH ASSET

-0.45

Correlation Coefficient

TRANS NATIONWIDE  GREENWICH ASSET

Very good diversification

The 3 months correlation between TRANS and GREENWICH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding TRANS NATIONWIDE EXPRESS PLC and GREENWICH ASSET ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENWICH ASSET ETF and TRANS NATIONWIDE 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 TRANS NATIONWIDE EXPRESS PLC are associated (or correlated) with GREENWICH ASSET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENWICH ASSET ETF has no effect on the direction of TRANS NATIONWIDE i.e., TRANS NATIONWIDE and GREENWICH ASSET go up and down completely randomly.

Pair Corralation between TRANS NATIONWIDE and GREENWICH ASSET

Assuming the 90 days trading horizon TRANS NATIONWIDE EXPRESS PLC is expected to generate 0.94 times more return on investment than GREENWICH ASSET. However, TRANS NATIONWIDE EXPRESS PLC is 1.07 times less risky than GREENWICH ASSET. It trades about 0.31 of its potential returns per unit of risk. GREENWICH ASSET ETF is currently generating about -0.21 per unit of risk. If you would invest  123.00  in TRANS NATIONWIDE EXPRESS PLC on October 16, 2024 and sell it today you would earn a total of  77.00  from holding TRANS NATIONWIDE EXPRESS PLC or generate 62.6% return on investment over 90 days.

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

TRANS NATIONWIDE EXPRESS PLC  vs.  GREENWICH ASSET ETF

TRANS NATIONWIDE EXP

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRANS NATIONWIDE EXPRESS PLC are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, TRANS NATIONWIDE showed solid returns over the last few months and may actually be approaching a breakup point.

GREENWICH ASSET ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENWICH ASSET ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with TRANS NATIONWIDE and GREENWICH ASSET

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

The idea behind TRANS NATIONWIDE EXPRESS PLC and GREENWICH ASSET ETF 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.