Correlation Between Greentown Management and OFAL

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

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

Diversification Opportunities for Greentown Management and OFAL

-0.43

Correlation Coefficient

Greentown Management  OFAL

Very good diversification

The 3 months correlation between Greentown and OFAL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Greentown Management Holdings and OFAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFAL and Greentown Management 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 Greentown Management Holdings are associated (or correlated) with OFAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFAL has no effect on the direction of Greentown Management i.e., Greentown Management and OFAL go up and down completely randomly.

Pair Corralation between Greentown Management and OFAL

Assuming the 90 days horizon Greentown Management Holdings is expected to generate 0.06 times more return on investment than OFAL. However, Greentown Management Holdings is 16.31 times less risky than OFAL. It trades about 0.12 of its potential returns per unit of risk. OFAL is currently generating about -0.08 per unit of risk. If you would invest  47.00  in Greentown Management Holdings on May 27, 2025 and sell it today you would earn a total of  3.00  from holding Greentown Management Holdings or generate 6.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Greentown Management Holdings  vs.  OFAL

Greentown Management

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Greentown Management Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Greentown Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

OFAL

Risk-Adjusted Performance

Weakest

Over the last 90 days OFAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Greentown Management and OFAL

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

The idea behind Greentown Management Holdings and OFAL 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.