Correlation Between Green Dot and Owl Rock

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

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

Diversification Opportunities for Green Dot and Owl Rock

-0.67

Correlation Coefficient

Green Dot  Owl Rock

Excellent diversification

The 3 months correlation between Green and Owl is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot and Owl Rock Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owl Rock Capital and Green Dot 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 Green Dot are associated (or correlated) with Owl Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owl Rock Capital has no effect on the direction of Green Dot i.e., Green Dot and Owl Rock go up and down completely randomly.

Pair Corralation between Green Dot and Owl Rock

If you would invest  935.00  in Green Dot on September 27, 2024 and sell it today you would earn a total of  137.00  from holding Green Dot or generate 14.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.79%
Values	Daily Returns

Green Dot  vs.  Owl Rock Capital

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.

Owl Rock Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Owl Rock Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Owl Rock is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Green Dot and Owl Rock

The main advantage of trading using opposite Green Dot and Owl Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Dot position performs unexpectedly, Owl Rock 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 Owl Rock will offset losses from the drop in Owl Rock's long position.

The idea behind Green Dot and Owl Rock Capital 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.