Correlation Between GreenSky and BEBIDA BEVERAGE

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

Diversification Opportunities for GreenSky and BEBIDA BEVERAGE

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between GreenSky and BEBIDA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GreenSky Inc and BEBIDA BEVERAGE CO in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on BEBIDA BEVERAGE CO 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 BEBIDA BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBIDA BEVERAGE CO has no effect on the direction of GreenSky i.e., GreenSky and BEBIDA BEVERAGE go up and down completely randomly.

Pair Corralation between GreenSky and BEBIDA BEVERAGE

Given the investment horizon of 90 days GreenSky is expected to generate 0.05 times more return on investment than BEBIDA BEVERAGE. However, GreenSky is 19.24 times less risky than BEBIDA BEVERAGE. It trades about 0.03 of its potential returns per unit of risk. BEBIDA BEVERAGE CO is currently generating about -0.45 per unit of risk. If you would invest  1,004  in GreenSky on February 18, 2022 and sell it today you would earn a total of  16.00  from holding GreenSky or generate 1.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy16.13%
ValuesDaily Returns

GreenSky Inc  vs.  BEBIDA BEVERAGE CO

 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 latest stock price disturbance, may contribute to short-term losses for the investors.
BEBIDA BEVERAGE CO 
BEBIDA Performance
0 of 100
Over the last 90 days BEBIDA BEVERAGE CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

GreenSky and BEBIDA BEVERAGE Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with GreenSky and BEBIDA BEVERAGE

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

GreenSky

Pair trading matchups for GreenSky

The idea behind GreenSky and BEBIDA BEVERAGE CO 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.

BEBIDA BEVERAGE CO

Pair trading matchups for BEBIDA BEVERAGE

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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