Correlation Between Finance Of and Green Dot

Can any of the company-specific risk be diversified away by investing in both Finance Of 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 Finance Of and Green Dot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Finance of America and Green Dot, you can compare the effects of market volatilities on Finance Of 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 Finance Of with a short position of Green Dot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finance Of and Green Dot.

Diversification Opportunities for Finance Of and Green Dot

-0.33

Correlation Coefficient

Finance Of  Green Dot

Very good diversification

The 3 months correlation between Finance and Green is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Finance of America and Green Dot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Dot and Finance Of 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 Finance of America 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 Finance Of i.e., Finance Of and Green Dot go up and down completely randomly.

Pair Corralation between Finance Of and Green Dot

Considering the 90-day investment horizon Finance of America is expected to generate 2.26 times more return on investment than Green Dot. However, Finance Of is 2.26 times more volatile than Green Dot. It trades about 0.19 of its potential returns per unit of risk. Green Dot is currently generating about 0.0 per unit of risk. If you would invest  789.00  in Finance of America on August 31, 2024 and sell it today you would earn a total of  1,063  from holding Finance of America or generate 134.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Finance of America  vs.  Green Dot

Finance of America

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Finance of America are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Finance Of sustained solid returns over the last few months and may actually be approaching a breakup point.

Green Dot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Dot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Green Dot is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Finance Of and Green Dot

The main advantage of trading using opposite Finance Of and Green Dot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finance Of 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.

The idea behind Finance of America and Green Dot 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.