Correlation Between Green Dot and PRA

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

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

Diversification Opportunities for Green Dot and PRA

0.54

Correlation Coefficient

Green Dot  PRA

Very weak diversification

The 3 months correlation between Green and PRA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot and PRA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRA Group and Green Dot 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 Green Dot are associated (or correlated) with PRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRA Group has no effect on the direction of Green Dot i.e., Green Dot and PRA go up and down completely randomly.

Pair Corralation between Green Dot and PRA

Given the investment horizon of 90 days Green Dot is expected to generate 1.58 times more return on investment than PRA. However, Green Dot is 1.58 times more volatile than PRA Group. It trades about 0.09 of its potential returns per unit of risk. PRA Group is currently generating about 0.08 per unit of risk. If you would invest  820.00  in Green Dot on May 6, 2025 and sell it today you would earn a total of  168.00  from holding Green Dot or generate 20.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Green Dot  vs.  PRA Group

Green Dot

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Green Dot are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Green Dot unveiled solid returns over the last few months and may actually be approaching a breakup point.

PRA Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PRA Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, PRA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Green Dot and PRA

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

The idea behind Green Dot and PRA Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.