Correlation Between Equinix and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both Equinix and GREENLIGHT CAP 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 Equinix and GREENLIGHT CAP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and GREENLIGHT CAP RE, you can compare the effects of market volatilities on Equinix and GREENLIGHT CAP 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 Equinix with a short position of GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and GREENLIGHT CAP.
Diversification Opportunities for Equinix and GREENLIGHT CAP
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equinix and GREENLIGHT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE and Equinix 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 Equinix are associated (or correlated) with GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of Equinix i.e., Equinix and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between Equinix and GREENLIGHT CAP
Assuming the 90 days trading horizon Equinix is expected to generate 0.93 times more return on investment than GREENLIGHT CAP. However, Equinix is 1.08 times less risky than GREENLIGHT CAP. It trades about 0.11 of its potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.07 per unit of risk. If you would invest 66,881 in Equinix on September 24, 2024 and sell it today you would earn a total of 21,299 from holding Equinix or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. GREENLIGHT CAP RE
Performance |
| Timeline |
| Equinix |
| GREENLIGHT CAP RE |
Equinix and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and GREENLIGHT CAP
The main advantage of trading using opposite Equinix and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, GREENLIGHT CAP 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 CAP will offset losses from the drop in GREENLIGHT CAP's long position.| Equinix vs. Crown Castle International | Equinix vs. W P Carey | Equinix vs. Gaming and Leisure | Equinix vs. Lamar Advertising |
| GREENLIGHT CAP vs. COFCO Joycome Foods | GREENLIGHT CAP vs. Tower One Wireless | GREENLIGHT CAP vs. Ebro Foods SA | GREENLIGHT CAP vs. Astral Foods Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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