Correlation Between Rheinmetall and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Rheinmetall 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 Rheinmetall and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and GreenX Metals, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and GreenX Metals.
Diversification Opportunities for Rheinmetall and GreenX Metals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rheinmetall and GreenX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and GreenX Metals go up and down completely randomly.
Pair Corralation between Rheinmetall and GreenX Metals
Assuming the 90 days trading horizon Rheinmetall is expected to generate 1.02 times less return on investment than GreenX Metals. But when comparing it to its historical volatility, Rheinmetall AG is 1.04 times less risky than GreenX Metals. It trades about 0.45 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,400 in GreenX Metals on October 26, 2024 and sell it today you would earn a total of 650.00 from holding GreenX Metals or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. GreenX Metals
Performance |
| Timeline |
| Rheinmetall AG |
| GreenX Metals |
Rheinmetall and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and GreenX Metals
The main advantage of trading using opposite Rheinmetall and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. GreenX Metals | Rheinmetall vs. Vulcan Materials Co | Rheinmetall vs. Summit Materials Cl | Rheinmetall vs. Compagnie Plastic Omnium |
| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Ferrexpo PLC | GreenX Metals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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