Correlation Between Greensky Inc and Shift4 Payments

By analyzing existing cross correlation between Greensky Inc Cl and Shift4 Payments, you can compare the effects of market volatilities on Greensky Inc and Shift4 Payments 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 Inc with a short position of Shift4 Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greensky Inc and Shift4 Payments.

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Can any of the company-specific risk be diversified away by investing in both Greensky Inc and Shift4 Payments 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 Inc and Shift4 Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Greensky Inc and Shift4 Payments

0.59
  Correlation Coefficient
Greensky Inc Cl
Shift4 Payments

Very weak diversification

The 3 months correlation between Greensky and Shift4 is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Greensky Inc Cl and Shift4 Payments in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Shift4 Payments and Greensky Inc 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 Inc Cl are associated (or correlated) with Shift4 Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift4 Payments has no effect on the direction of Greensky Inc i.e., Greensky Inc and Shift4 Payments go up and down completely randomly.

Pair Corralation between Greensky Inc and Shift4 Payments

Given the investment horizon of 90 days Greensky Inc Cl is expected to generate 0.76 times more return on investment than Shift4 Payments. However, Greensky Inc Cl is 1.32 times less risky than Shift4 Payments. It trades about -0.17 of its potential returns per unit of risk. Shift4 Payments is currently generating about -0.34 per unit of risk. If you would invest  1,124  in Greensky Inc Cl on October 22, 2021 and sell it today you would lose (92.00)  from holding Greensky Inc Cl or give up 8.19% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.24%
ValuesDaily Returns

Greensky Inc Cl  vs.  Shift4 Payments

 Performance (%) 
      Timeline 
Greensky Inc Cl 
Greensky Performance
0 of 100
Over the last 90 days Greensky Inc Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in February 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Greensky Price Channel

Shift4 Payments 
Shift4 Performance
0 of 100
Over the last 90 days Shift4 Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Shift4 Price Channel

Greensky Inc and Shift4 Payments Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Greensky Inc and Shift4 Payments

The main advantage of trading using opposite Greensky Inc and Shift4 Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greensky Inc position performs unexpectedly, Shift4 Payments 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 Shift4 Payments will offset losses from the drop in Shift4 Payments' long position.

Greensky Inc Cl

Pair trading matchups for Greensky Inc

The idea behind Greensky Inc Cl and Shift4 Payments 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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