Correlation Between GreenSky and Blackberry

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Can any of the company-specific risk be diversified away by investing in both GreenSky and Blackberry 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 GreenSky and Blackberry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenSky and Blackberry, you can compare the effects of market volatilities on GreenSky and Blackberry 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 GreenSky with a short position of Blackberry. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenSky and Blackberry.

Diversification Opportunities for GreenSky and Blackberry

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between GreenSky and Blackberry is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GreenSky Inc and Blackberry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackberry and GreenSky 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 GreenSky are associated (or correlated) with Blackberry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackberry has no effect on the direction of GreenSky i.e., GreenSky and Blackberry go up and down completely randomly.

Pair Corralation between GreenSky and Blackberry

If you would invest  543.00  in Blackberry on May 16, 2022 and sell it today you would earn a total of  135.00  from holding Blackberry or generate 24.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy2.33%
ValuesDaily Returns

GreenSky Inc  vs.  Blackberry

 Performance (%) 
       Timeline  
GreenSky 
GreenSky Performance
0 of 100
Over the last 90 days GreenSky has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, GreenSky is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Blackberry 
Blackberry Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blackberry are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Blackberry sustained solid returns over the last few months and may actually be approaching a breakup point.

Blackberry Price Channel

GreenSky and Blackberry Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GreenSky and Blackberry

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

GreenSky

Pair trading matchups for GreenSky

Universal Health vs. GreenSky
Horizon Therapeutics vs. GreenSky
Nike vs. GreenSky
Cto Realty vs. GreenSky
Prog Hldgs vs. GreenSky
Essential Properties vs. GreenSky
Semiconductor Bear vs. GreenSky
Ark Innovation vs. GreenSky
Rolls Royce vs. GreenSky
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against GreenSky as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. GreenSky's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, GreenSky's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to GreenSky.
The idea behind GreenSky and Blackberry 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.

Blackberry

Pair trading matchups for Blackberry

Universal Health vs. Blackberry
Prog Hldgs vs. Blackberry
Rolls Royce vs. Blackberry
Olema Pharmaceuticals vs. Blackberry
Semiconductor Bear vs. Blackberry
Horizon Therapeutics vs. Blackberry
Ark Innovation vs. Blackberry
Nike vs. Blackberry
Cto Realty vs. Blackberry
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Blackberry as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Blackberry's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Blackberry's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Blackberry.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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