Correlation Between Greentown Management and Raytech Holding

Can any of the company-specific risk be diversified away by investing in both Greentown Management and Raytech Holding 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 Raytech Holding 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 Raytech Holding Limited, you can compare the effects of market volatilities on Greentown Management and Raytech Holding 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 Raytech Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentown Management and Raytech Holding.

Diversification Opportunities for Greentown Management and Raytech Holding

0.72

Correlation Coefficient

Greentown Management  Raytech Holding

Poor diversification

The 3 months correlation between Greentown and Raytech is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Greentown Management Holdings and Raytech Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raytech Holding 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 Raytech Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raytech Holding has no effect on the direction of Greentown Management i.e., Greentown Management and Raytech Holding go up and down completely randomly.

Pair Corralation between Greentown Management and Raytech Holding

Assuming the 90 days horizon Greentown Management is expected to generate 5.4 times less return on investment than Raytech Holding. But when comparing it to its historical volatility, Greentown Management Holdings is 11.33 times less risky than Raytech Holding. It trades about 0.12 of its potential returns per unit of risk. Raytech Holding Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  239.00  in Raytech Holding Limited on May 26, 2025 and sell it today you would earn a total of  9.00  from holding Raytech Holding Limited or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.92%
Values	Daily Returns

Greentown Management Holdings  vs.  Raytech Holding Limited

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Raytech Holding

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Raytech Holding Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Raytech Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greentown Management and Raytech Holding

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

The idea behind Greentown Management Holdings and Raytech Holding Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.