Correlation Between Cars and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both Cars and Greenroc Mining 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 Cars and Greenroc Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Greenroc Mining PLC, you can compare the effects of market volatilities on Cars and Greenroc Mining 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 Cars with a short position of Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Greenroc Mining.
Diversification Opportunities for Cars and Greenroc Mining
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cars and Greenroc is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining PLC and Cars 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 Cars Inc are associated (or correlated) with Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Cars i.e., Cars and Greenroc Mining go up and down completely randomly.
Pair Corralation between Cars and Greenroc Mining
Assuming the 90 days trading horizon Cars Inc is expected to generate 0.72 times more return on investment than Greenroc Mining. However, Cars Inc is 1.39 times less risky than Greenroc Mining. It trades about 0.3 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.07 per unit of risk. If you would invest 1,560 in Cars Inc on August 24, 2024 and sell it today you would earn a total of 281.00 from holding Cars Inc or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.26% |
| Values | Daily Returns |
Cars Inc vs. Greenroc Mining PLC
Performance |
| Timeline |
| Cars Inc |
| Greenroc Mining PLC |
Cars and Greenroc Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Greenroc Mining
The main advantage of trading using opposite Cars and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Greenroc Mining 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.| Cars vs. Quadrise Plc | Cars vs. Intuitive Investments Group | Cars vs. European Metals Holdings | Cars vs. Athelney Trust plc |
| Greenroc Mining vs. Givaudan SA | Greenroc Mining vs. Antofagasta PLC | Greenroc Mining vs. Centamin PLC | Greenroc Mining vs. Atalaya Mining |
Check out your portfolio center.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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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