Correlation Between Greenlane Holdings and Designer Brands
Can any of the company-specific risk be diversified away by investing in both Greenlane Holdings and Designer Brands 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 Greenlane Holdings and Designer Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlane Holdings and Designer Brands, you can compare the effects of market volatilities on Greenlane Holdings and Designer Brands 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 Greenlane Holdings with a short position of Designer Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlane Holdings and Designer Brands.
Diversification Opportunities for Greenlane Holdings and Designer Brands
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greenlane and Designer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Greenlane Holdings and Designer Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Designer Brands and Greenlane Holdings 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 Greenlane Holdings are associated (or correlated) with Designer Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Designer Brands has no effect on the direction of Greenlane Holdings i.e., Greenlane Holdings and Designer Brands go up and down completely randomly.
Pair Corralation between Greenlane Holdings and Designer Brands
Given the investment horizon of 90 days Greenlane Holdings is expected to under-perform the Designer Brands. In addition to that, Greenlane Holdings is 8.81 times more volatile than Designer Brands. It trades about -0.1 of its total potential returns per unit of risk. Designer Brands is currently generating about -0.32 per unit of volatility. If you would invest 594.00 in Designer Brands on August 23, 2024 and sell it today you would lose (105.00) from holding Designer Brands or give up 17.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlane Holdings vs. Designer Brands
Performance |
| Timeline |
| Greenlane Holdings |
| Designer Brands |
Greenlane Holdings and Designer Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlane Holdings and Designer Brands
The main advantage of trading using opposite Greenlane Holdings and Designer Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlane Holdings position performs unexpectedly, Designer Brands 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 Designer Brands will offset losses from the drop in Designer Brands' long position.| Greenlane Holdings vs. PT Hanjaya Mandala | Greenlane Holdings vs. Kaival Brands Innovations | Greenlane Holdings vs. RLX Technology | Greenlane Holdings vs. 22nd Century Group |
| Designer Brands vs. Wolverine World Wide | Designer Brands vs. Weyco Group | Designer Brands vs. Steven Madden | Designer Brands vs. Rocky Brands |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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