Correlation Between VETIVA S and GREENWICH ASSET

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

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

Diversification Opportunities for VETIVA S and GREENWICH ASSET

-0.23

Correlation Coefficient

VETIVA S  GREENWICH ASSET

Very good diversification

The 3 months correlation between VETIVA and GREENWICH is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding VETIVA S P 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 VETIVA S 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 VETIVA S P 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 VETIVA S i.e., VETIVA S and GREENWICH ASSET go up and down completely randomly.

Pair Corralation between VETIVA S and GREENWICH ASSET

Assuming the 90 days trading horizon VETIVA S P is expected to generate 6.22 times more return on investment than GREENWICH ASSET. However, VETIVA S is 6.22 times more volatile than GREENWICH ASSET ETF. It trades about 0.1 of its potential returns per unit of risk. GREENWICH ASSET ETF is currently generating about 0.01 per unit of risk. If you would invest  20,701  in VETIVA S P on December 2, 2024 and sell it today you would earn a total of  1,899  from holding VETIVA S P or generate 9.17% return on investment over 90 days.

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

VETIVA S P  vs.  GREENWICH ASSET ETF

VETIVA S P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VETIVA S P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, VETIVA S exhibited solid returns over the last few months and may actually be approaching a breakup point.

GREENWICH ASSET ETF

Risk-Adjusted Performance

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 rather sound basic indicators, GREENWICH ASSET is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VETIVA S and GREENWICH ASSET

The main advantage of trading using opposite VETIVA S and GREENWICH ASSET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VETIVA S 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 VETIVA S P 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.