Correlation Between Flow Capital and Green Street
Can any of the company-specific risk be diversified away by investing in both Flow Capital and Green Street 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 Flow Capital and Green Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Capital Corp and Green Street Capital, you can compare the effects of market volatilities on Flow Capital and Green Street 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 Flow Capital with a short position of Green Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Capital and Green Street.
Diversification Opportunities for Flow Capital and Green Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Flow and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and Green Street Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Street Capital and Flow Capital 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 Flow Capital Corp are associated (or correlated) with Green Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Street Capital has no effect on the direction of Flow Capital i.e., Flow Capital and Green Street go up and down completely randomly.
Pair Corralation between Flow Capital and Green Street
Assuming the 90 days horizon Flow Capital Corp is expected to generate 0.68 times more return on investment than Green Street. However, Flow Capital Corp is 1.48 times less risky than Green Street. It trades about 0.05 of its potential returns per unit of risk. Green Street Capital is currently generating about -0.05 per unit of risk. If you would invest 43.00 in Flow Capital Corp on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Flow Capital Corp or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 57.89% |
| Values | Daily Returns |
Flow Capital Corp vs. Green Street Capital
Performance |
| Timeline |
| Flow Capital Corp |
| Green Street Capital |
Flow Capital and Green Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Capital and Green Street
The main advantage of trading using opposite Flow Capital and Green Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Capital position performs unexpectedly, Green Street 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 Green Street will offset losses from the drop in Green Street's long position.| Flow Capital vs. Guardian Capital Group | Flow Capital vs. Urbana | Flow Capital vs. Princeton Capital | Flow Capital vs. Blackhawk Growth Corp |
| Green Street vs. Blackrock International Growth | Green Street vs. Blackrock Enhanced Equity | Green Street vs. Eaton Vance Tax | Green Street vs. Blackrock Resources Commodities |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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