Correlation Between 1919 Financial and Green Century
Can any of the company-specific risk be diversified away by investing in both 1919 Financial and Green Century 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 1919 Financial and Green Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1919 Financial Services and Green Century Balanced, you can compare the effects of market volatilities on 1919 Financial and Green Century 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 1919 Financial with a short position of Green Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and Green Century.
Diversification Opportunities for 1919 Financial and Green Century
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1919 and Green is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and Green Century Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Century Balanced and 1919 Financial 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 1919 Financial Services are associated (or correlated) with Green Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Century Balanced has no effect on the direction of 1919 Financial i.e., 1919 Financial and Green Century go up and down completely randomly.
Pair Corralation between 1919 Financial and Green Century
Assuming the 90 days horizon 1919 Financial Services is expected to generate 0.61 times more return on investment than Green Century. However, 1919 Financial Services is 1.65 times less risky than Green Century. It trades about 0.13 of its potential returns per unit of risk. Green Century Balanced is currently generating about -0.19 per unit of risk. If you would invest 2,896 in 1919 Financial Services on October 21, 2024 and sell it today you would earn a total of 68.00 from holding 1919 Financial Services or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1919 Financial Services vs. Green Century Balanced
Performance |
| Timeline |
| 1919 Financial Services |
| Green Century Balanced |
1919 Financial and Green Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1919 Financial and Green Century
The main advantage of trading using opposite 1919 Financial and Green Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial position performs unexpectedly, Green Century 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 Century will offset losses from the drop in Green Century's long position.| 1919 Financial vs. Extended Market Index | 1919 Financial vs. Ab All Market | 1919 Financial vs. Barings Emerging Markets | 1919 Financial vs. Ashmore Emerging Markets |
| Green Century vs. Green Century Equity | Green Century vs. Green Century Equity | Green Century vs. Green Century Msci | Green Century vs. Green Century Msci |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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