Correlation Between Garden Stage and Robinhood Markets

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

By analyzing existing cross correlation between Garden Stage Limited and Robinhood Markets, you can compare the effects of market volatilities on Garden Stage and Robinhood Markets 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 Garden Stage with a short position of Robinhood Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garden Stage and Robinhood Markets.

Diversification Opportunities for Garden Stage and Robinhood Markets

-0.48

Correlation Coefficient

Garden Stage  Robinhood Markets

Very good diversification

The 3 months correlation between Garden and Robinhood is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Garden Stage Limited and Robinhood Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinhood Markets and Garden Stage 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 Garden Stage Limited are associated (or correlated) with Robinhood Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinhood Markets has no effect on the direction of Garden Stage i.e., Garden Stage and Robinhood Markets go up and down completely randomly.

Pair Corralation between Garden Stage and Robinhood Markets

Given the investment horizon of 90 days Garden Stage Limited is expected to generate 7.68 times more return on investment than Robinhood Markets. However, Garden Stage is 7.68 times more volatile than Robinhood Markets. It trades about 0.04 of its potential returns per unit of risk. Robinhood Markets is currently generating about 0.23 per unit of risk. If you would invest  299.00  in Garden Stage Limited on September 13, 2024 and sell it today you would lose (238.57) from holding Garden Stage Limited or give up 79.79% of portfolio value over 90 days.

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

Garden Stage Limited  vs.  Robinhood Markets

Garden Stage Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Garden Stage Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Garden Stage showed solid returns over the last few months and may actually be approaching a breakup point.

Robinhood Markets

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Robinhood Markets are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Robinhood Markets exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Garden Stage and Robinhood Markets

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

The idea behind Garden Stage Limited and Robinhood Markets 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.