Correlation Between Greenspring Income and Greenspring Fund

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

By analyzing existing cross correlation between Greenspring Income Opportunities and Greenspring Fund Retail, you can compare the effects of market volatilities on Greenspring Income and Greenspring Fund 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 Greenspring Income with a short position of Greenspring Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenspring Income and Greenspring Fund.

Diversification Opportunities for Greenspring Income and Greenspring Fund

0.89

Correlation Coefficient

Greenspring Income  Greenspring Fund

Very poor diversification

The 3 months correlation between Greenspring and Greenspring is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Greenspring Income Opportuniti and Greenspring Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenspring Fund Retail and Greenspring Income 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 Greenspring Income Opportunities are associated (or correlated) with Greenspring Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenspring Fund Retail has no effect on the direction of Greenspring Income i.e., Greenspring Income and Greenspring Fund go up and down completely randomly.

Pair Corralation between Greenspring Income and Greenspring Fund

Assuming the 90 days horizon Greenspring Income is expected to generate 9.95 times less return on investment than Greenspring Fund. But when comparing it to its historical volatility, Greenspring Income Opportunities is 8.35 times less risky than Greenspring Fund. It trades about 0.18 of its potential returns per unit of risk. Greenspring Fund Retail is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,537  in Greenspring Fund Retail on September 4, 2024 and sell it today you would earn a total of  323.00  from holding Greenspring Fund Retail or generate 12.73% return on investment over 90 days.

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

Greenspring Income Opportuniti  vs.  Greenspring Fund Retail

Greenspring Income

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenspring Income Opportunities are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Greenspring Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Greenspring Fund Retail

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Greenspring Fund Retail are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Greenspring Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Greenspring Income and Greenspring Fund

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

The idea behind Greenspring Income Opportunities and Greenspring Fund Retail 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.