Correlation Between Trupanion and Green Dot
Can any of the company-specific risk be diversified away by investing in both Trupanion 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 Trupanion and Green Dot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and Green Dot, you can compare the effects of market volatilities on Trupanion 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 Trupanion with a short position of Green Dot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and Green Dot.
Diversification Opportunities for Trupanion and Green Dot
Very good diversification
The 3 months correlation between Trupanion and Green is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and Green Dot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Dot and Trupanion 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 Trupanion 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 Trupanion i.e., Trupanion and Green Dot go up and down completely randomly.
Pair Corralation between Trupanion and Green Dot
Given the investment horizon of 90 days Trupanion is expected to generate 0.81 times more return on investment than Green Dot. However, Trupanion is 1.23 times less risky than Green Dot. It trades about 0.12 of its potential returns per unit of risk. Green Dot is currently generating about 0.01 per unit of risk. If you would invest 4,457 in Trupanion on September 12, 2024 and sell it today you would earn a total of 1,001 from holding Trupanion or generate 22.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. Green Dot
Performance |
| Timeline |
| Trupanion |
| Green Dot |
Trupanion and Green Dot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and Green Dot
The main advantage of trading using opposite Trupanion and Green Dot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion 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.| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
| Green Dot vs. Guidewire Software | Green Dot vs. Evertec | Green Dot vs. Axos Financial | Green Dot vs. Trupanion |
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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