Correlation Between Analog Devices and Greene King

Can any of the company-specific risk be diversified away by investing in both Analog Devices and Greene King 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 Analog Devices and Greene King into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Analog Devices and Greene King Plc, you can compare the effects of market volatilities on Analog Devices and Greene King 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 Analog Devices with a short position of Greene King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Greene King.

Diversification Opportunities for Analog Devices and Greene King

0.0

Correlation Coefficient

Analog Devices  Greene King

Pay attention - limited upside

The 3 months correlation between Analog and Greene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Greene King Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene King Plc and Analog Devices 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 Analog Devices are associated (or correlated) with Greene King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene King Plc has no effect on the direction of Analog Devices i.e., Analog Devices and Greene King go up and down completely randomly.

Pair Corralation between Analog Devices and Greene King

If you would invest  20,755  in Analog Devices on March 13, 2024 and sell it today you would earn a total of  2,875  from holding Analog Devices or generate 13.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Analog Devices  vs.  Greene King Plc

Analog Devices

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Greene King Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greene King Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Greene King is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Analog Devices and Greene King

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

The idea behind Analog Devices and Greene King Plc 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 the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.