Correlation Between Greene King and Banco De

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

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

Diversification Opportunities for Greene King and Banco De

0.0

Correlation Coefficient

Greene King  Banco De

Pay attention - limited upside

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

Pair Corralation between Greene King and Banco De

If you would invest  2,203  in Banco De Chile on January 30, 2024 and sell it today you would earn a total of  17.00  from holding Banco De Chile or generate 0.77% return on investment over 90 days.

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

Greene King Plc  vs.  Banco De Chile

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

Banco De Chile

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Banco De Chile are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Banco De may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Greene King and Banco De

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

The idea behind Greene King Plc and Banco De Chile 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.