Correlation Between GREENX METALS and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Lion Biotechnologies 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 GREENX METALS and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and Lion Biotechnologies, you can compare the effects of market volatilities on GREENX METALS and Lion Biotechnologies 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 GREENX METALS with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Lion Biotechnologies.
Diversification Opportunities for GREENX METALS and Lion Biotechnologies
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GREENX and Lion is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and GREENX METALS 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 GREENX METALS LTD are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of GREENX METALS i.e., GREENX METALS and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between GREENX METALS and Lion Biotechnologies
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the Lion Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, GREENX METALS LTD is 1.28 times less risky than Lion Biotechnologies. The stock trades about -0.15 of its potential returns per unit of risk. The Lion Biotechnologies is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Lion Biotechnologies on August 28, 2024 and sell it today you would lose (135.00) from holding Lion Biotechnologies or give up 13.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Lion Biotechnologies
Performance |
| Timeline |
| GREENX METALS LTD |
| Lion Biotechnologies |
GREENX METALS and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Lion Biotechnologies
The main advantage of trading using opposite GREENX METALS and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech |
| Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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