Correlation Between Green Dot and Western Union
Can any of the company-specific risk be diversified away by investing in both Green Dot and Western Union 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 Green Dot and Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Dot and Western Union Co, you can compare the effects of market volatilities on Green Dot and Western Union 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 Green Dot with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Dot and Western Union.
Diversification Opportunities for Green Dot and Western Union
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Green and Western is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Green Dot 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 Green Dot are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Green Dot i.e., Green Dot and Western Union go up and down completely randomly.
Pair Corralation between Green Dot and Western Union
Given the investment horizon of 90 days Green Dot is expected to generate 0.63 times more return on investment than Western Union. However, Green Dot is 1.58 times less risky than Western Union. It trades about 0.26 of its potential returns per unit of risk. Western Union Co is currently generating about 0.03 per unit of risk. If you would invest 888.00 in Green Dot on November 18, 2024 and sell it today you would earn a total of 63.00 from holding Green Dot or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Dot vs. Western Union Co
Performance |
| Timeline |
| Green Dot |
| Western Union |
Green Dot and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Dot and Western Union
The main advantage of trading using opposite Green Dot and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Dot position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| Green Dot vs. Guidewire Software | Green Dot vs. Evertec | Green Dot vs. Axos Financial | Green Dot vs. Trupanion |
| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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