Correlation Between Informa Plc and GreenSky

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

Diversification Opportunities for Informa Plc and GreenSky

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Informa and GreenSky is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Informa Plc Jersey and GreenSky Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenSky and Informa Plc 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 Informa Plc Jersey 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 Informa Plc i.e., Informa Plc and GreenSky go up and down completely randomly.

Pair Corralation between Informa Plc and GreenSky

Assuming the 90 days horizon Informa Plc is expected to generate 646.4 times less return on investment than GreenSky. But when comparing it to its historical volatility, Informa Plc Jersey is 1.82 times less risky than GreenSky. It trades about 0.0 of its potential returns per unit of risk. GreenSky is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  444.00  in GreenSky on August 29, 2022 and sell it today you would earn a total of  576.00  from holding GreenSky or generate 129.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy67.07%
ValuesDaily Returns

Informa Plc Jersey  vs.  GreenSky Inc

 Performance (%) 
       Timeline  
Informa Plc Jersey 
Informa Performance
0 of 100
Over the last 90 days Informa Plc Jersey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking indicators, Informa Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Informa 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Informa Plc and GreenSky Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Informa Plc and GreenSky

The main advantage of trading using opposite Informa Plc and GreenSky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Informa Plc 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.
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The idea behind Informa Plc Jersey 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.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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