Correlation Between Nelnet and Green Dot
Can any of the company-specific risk be diversified away by investing in both Nelnet and Green Dot 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 Nelnet and Green Dot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and Green Dot, you can compare the effects of market volatilities on Nelnet and Green Dot 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 Nelnet with a short position of Green Dot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and Green Dot.
Diversification Opportunities for Nelnet and Green Dot
Poor diversification
The 3 months correlation between Nelnet and Green is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and Green Dot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Dot and Nelnet 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 Nelnet Inc are associated (or correlated) with Green Dot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Dot has no effect on the direction of Nelnet i.e., Nelnet and Green Dot go up and down completely randomly.
Pair Corralation between Nelnet and Green Dot
Considering the 90-day investment horizon Nelnet Inc is expected to generate 0.42 times more return on investment than Green Dot. However, Nelnet Inc is 2.37 times less risky than Green Dot. It trades about 0.03 of its potential returns per unit of risk. Green Dot is currently generating about -0.02 per unit of risk. If you would invest 9,352 in Nelnet Inc on August 27, 2024 and sell it today you would earn a total of 1,441 from holding Nelnet Inc or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. Green Dot
Performance |
| Timeline |
| Nelnet Inc |
| Green Dot |
Nelnet and Green Dot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and Green Dot
The main advantage of trading using opposite Nelnet and Green Dot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, Green Dot 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 Dot will offset losses from the drop in Green Dot's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Navient Corp | Nelnet vs. Federal Agricultural Mortgage |
| Green Dot vs. Guidewire Software | Green Dot vs. Envestnet | Green Dot vs. Evertec | Green Dot vs. Axos Financial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |