Correlation Between WT OFFSHORE and GREENLIGHT CAPRE

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

By analyzing existing cross correlation between WT OFFSHORE and GREENLIGHT CAPRE A, you can compare the effects of market volatilities on WT OFFSHORE and GREENLIGHT CAPRE 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 WT OFFSHORE with a short position of GREENLIGHT CAPRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT OFFSHORE and GREENLIGHT CAPRE.

Diversification Opportunities for WT OFFSHORE and GREENLIGHT CAPRE

-0.27

Correlation Coefficient

WT OFFSHORE  GREENLIGHT CAPRE

Very good diversification

The 3 months correlation between UWV and GREENLIGHT is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and GREENLIGHT CAPRE A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAPRE A and WT OFFSHORE 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 WT OFFSHORE are associated (or correlated) with GREENLIGHT CAPRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAPRE A has no effect on the direction of WT OFFSHORE i.e., WT OFFSHORE and GREENLIGHT CAPRE go up and down completely randomly.

Pair Corralation between WT OFFSHORE and GREENLIGHT CAPRE

Assuming the 90 days trading horizon WT OFFSHORE is expected to under-perform the GREENLIGHT CAPRE. In addition to that, WT OFFSHORE is 1.92 times more volatile than GREENLIGHT CAPRE A. It trades about -0.05 of its total potential returns per unit of risk. GREENLIGHT CAPRE A is currently generating about 0.09 per unit of volatility. If you would invest  1,230  in GREENLIGHT CAPRE A on October 25, 2024 and sell it today you would earn a total of  130.00  from holding GREENLIGHT CAPRE A or generate 10.57% return on investment over 90 days.

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

WT OFFSHORE  vs.  GREENLIGHT CAPRE A

WT OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT OFFSHORE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

GREENLIGHT CAPRE A

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GREENLIGHT CAPRE A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GREENLIGHT CAPRE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with WT OFFSHORE and GREENLIGHT CAPRE

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

The idea behind WT OFFSHORE and GREENLIGHT CAPRE A 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.