Correlation Between Applied Blockchain and Greenhill

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

By analyzing existing cross correlation between Applied Blockchain and Greenhill Co, you can compare the effects of market volatilities on Applied Blockchain and Greenhill 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 Applied Blockchain with a short position of Greenhill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and Greenhill.

Diversification Opportunities for Applied Blockchain and Greenhill

-0.32

Correlation Coefficient

Applied Blockchain  Greenhill

Very good diversification

The 3 months correlation between Applied and Greenhill is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Greenhill Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenhill and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with Greenhill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenhill has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Greenhill go up and down completely randomly.

Pair Corralation between Applied Blockchain and Greenhill

If you would invest  1,499  in Greenhill Co on February 4, 2024 and sell it today you would earn a total of  0.00  from holding Greenhill Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.27%
Values	Daily Returns

Applied Blockchain  vs.  Greenhill Co

Applied Blockchain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Blockchain 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 essential indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Greenhill

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenhill Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Greenhill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Applied Blockchain and Greenhill

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

The idea behind Applied Blockchain and Greenhill 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.