Correlation Between GREENX METALS and NEXON
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and NEXON 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 NEXON 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 NEXON Co, you can compare the effects of market volatilities on GREENX METALS and NEXON 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 NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and NEXON.
Diversification Opportunities for GREENX METALS and NEXON
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENX and NEXON is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON 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 NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of GREENX METALS i.e., GREENX METALS and NEXON go up and down completely randomly.
Pair Corralation between GREENX METALS and NEXON
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.57 times more return on investment than NEXON. However, GREENX METALS is 1.57 times more volatile than NEXON Co. It trades about 0.03 of its potential returns per unit of risk. NEXON Co is currently generating about -0.02 per unit of risk. If you would invest 37.00 in GREENX METALS LTD on December 11, 2024 and sell it today you would earn a total of 12.00 from holding GREENX METALS LTD or generate 32.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. NEXON Co
Performance |
| Timeline |
| GREENX METALS LTD |
| NEXON |
GREENX METALS and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and NEXON
The main advantage of trading using opposite GREENX METALS and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| GREENX METALS vs. Lamar Advertising | ||
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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