Correlation Between International Business and GreenSky

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both International Business and GreenSky 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 International Business and GreenSky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and GreenSky, you can compare the effects of market volatilities on International Business and GreenSky 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 International Business with a short position of GreenSky. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and GreenSky.

Diversification Opportunities for International Business and GreenSky

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between International and GreenSky is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and GreenSky Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenSky and International Business 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 International Business Machines are associated (or correlated) with GreenSky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenSky has no effect on the direction of International Business i.e., International Business and GreenSky go up and down completely randomly.

Pair Corralation between International Business and GreenSky

Considering the 90-day investment horizon International Business is expected to generate 13.45 times less return on investment than GreenSky. But when comparing it to its historical volatility, International Business Machines is 3.26 times less risky than GreenSky. It trades about 0.02 of its potential returns per unit of risk. GreenSky is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  581.00  in GreenSky on May 17, 2022 and sell it today you would earn a total of  439.00  from holding GreenSky or generate 75.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy66.3%
ValuesDaily Returns

International Business Machine  vs.  GreenSky Inc

 Performance (%) 
       Timeline  
International Business 
International Performance
0 of 100
Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady fundamental drivers, International Business is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

International Price Channel

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.

International Business and GreenSky Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with International Business and GreenSky

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

International Business Machines

Pair trading matchups for International Business

The idea behind International Business Machines and GreenSky 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.

GreenSky

Pair trading matchups for GreenSky

Graphic Packaging vs. GreenSky
Wex vs. GreenSky
Skyworks Solutions vs. GreenSky
Vmware vs. GreenSky
Amazon vs. GreenSky
Walker Dunlop vs. GreenSky
Visa vs. GreenSky
Oracle vs. GreenSky
Ford vs. GreenSky
United Rentals vs. GreenSky
Aspen Technology 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go