Correlation Between RTL Group and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both RTL Group and GreenX Metals 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 RTL Group and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RTL Group SA and GreenX Metals, you can compare the effects of market volatilities on RTL Group and GreenX Metals 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 RTL Group with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of RTL Group and GreenX Metals.
Diversification Opportunities for RTL Group and GreenX Metals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RTL and GreenX is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding RTL Group SA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and RTL Group 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 RTL Group SA are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of RTL Group i.e., RTL Group and GreenX Metals go up and down completely randomly.
Pair Corralation between RTL Group and GreenX Metals
Assuming the 90 days trading horizon RTL Group SA is expected to under-perform the GreenX Metals. But the stock apears to be less risky and, when comparing its historical volatility, RTL Group SA is 2.15 times less risky than GreenX Metals. The stock trades about -0.04 of its potential returns per unit of risk. The GreenX Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,050 in GreenX Metals on September 2, 2024 and sell it today you would earn a total of 650.00 from holding GreenX Metals or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RTL Group SA vs. GreenX Metals
Performance |
| Timeline |
| RTL Group SA |
| GreenX Metals |
RTL Group and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RTL Group and GreenX Metals
The main advantage of trading using opposite RTL Group and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RTL Group position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| RTL Group vs. GreenX Metals | RTL Group vs. Panther Metals PLC | RTL Group vs. Trainline Plc | RTL Group vs. Southern Copper Corp |
| GreenX Metals vs. Spirent Communications plc | GreenX Metals vs. Gamma Communications PLC | GreenX Metals vs. AMG Advanced Metallurgical | GreenX Metals vs. British American Tobacco |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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