Correlation Between Worley Parsons and Greenway Technologies

Can any of the company-specific risk be diversified away by investing in both Worley Parsons and Greenway Technologies 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 Worley Parsons and Greenway Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Worley Parsons and Greenway Technologies, you can compare the effects of market volatilities on Worley Parsons and Greenway Technologies 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 Worley Parsons with a short position of Greenway Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worley Parsons and Greenway Technologies.

Diversification Opportunities for Worley Parsons and Greenway Technologies

-0.65

Correlation Coefficient

Worley Parsons  Greenway Technologies

Excellent diversification

The 3 months correlation between Worley and Greenway is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Worley Parsons and Greenway Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenway Technologies and Worley Parsons 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 Worley Parsons are associated (or correlated) with Greenway Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenway Technologies has no effect on the direction of Worley Parsons i.e., Worley Parsons and Greenway Technologies go up and down completely randomly.

Pair Corralation between Worley Parsons and Greenway Technologies

Assuming the 90 days horizon Worley Parsons is expected to generate 68.12 times less return on investment than Greenway Technologies. But when comparing it to its historical volatility, Worley Parsons is 6.65 times less risky than Greenway Technologies. It trades about 0.01 of its potential returns per unit of risk. Greenway Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Greenway Technologies on October 17, 2024 and sell it today you would earn a total of  0.00  from holding Greenway Technologies or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Worley Parsons  vs.  Greenway Technologies

Worley Parsons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worley Parsons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Greenway Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenway Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Greenway Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worley Parsons and Greenway Technologies

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

The idea behind Worley Parsons and Greenway Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..