Correlation Between MBIA and Greenhill
Can any of the company-specific risk be diversified away by investing in both MBIA and Greenhill 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 MBIA and Greenhill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBIA Inc and Greenhill Co, you can compare the effects of market volatilities on MBIA and Greenhill 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 MBIA with a short position of Greenhill. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBIA and Greenhill.
Diversification Opportunities for MBIA and Greenhill
Weak diversification
The 3 months correlation between MBIA and Greenhill is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MBIA Inc and Greenhill Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenhill and MBIA 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 MBIA Inc are associated (or correlated) with Greenhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenhill has no effect on the direction of MBIA i.e., MBIA and Greenhill go up and down completely randomly.
Pair Corralation between MBIA and Greenhill
If you would invest 378.00 in MBIA Inc on August 27, 2024 and sell it today you would earn a total of 325.00 from holding MBIA Inc or generate 85.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
MBIA Inc vs. Greenhill Co
Performance |
| Timeline |
| MBIA Inc |
| Greenhill |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MBIA and Greenhill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBIA and Greenhill
The main advantage of trading using opposite MBIA and Greenhill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBIA position performs unexpectedly, Greenhill 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 Greenhill will offset losses from the drop in Greenhill's long position.The idea behind MBIA Inc and Greenhill Co 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.| Greenhill vs. Magic Empire Global | Greenhill vs. Applied Blockchain | Greenhill vs. Zhong Yang Financial | Greenhill vs. Netcapital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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