Correlation Between GREENX METALS and CSL
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and CSL 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 CSL 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 CSL Limited, you can compare the effects of market volatilities on GREENX METALS and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and CSL.
Diversification Opportunities for GREENX METALS and CSL
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GREENX and CSL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of GREENX METALS i.e., GREENX METALS and CSL go up and down completely randomly.
Pair Corralation between GREENX METALS and CSL
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 4.05 times more return on investment than CSL. However, GREENX METALS is 4.05 times more volatile than CSL Limited. It trades about 0.13 of its potential returns per unit of risk. CSL Limited is currently generating about -0.23 per unit of risk. If you would invest 43.00 in GREENX METALS LTD on November 7, 2024 and sell it today you would earn a total of 4.00 from holding GREENX METALS LTD or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. CSL Limited
Performance |
| Timeline |
| GREENX METALS LTD |
| CSL Limited |
GREENX METALS and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and CSL
The main advantage of trading using opposite GREENX METALS and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| GREENX METALS vs. Chiba Bank | GREENX METALS vs. GMO Internet | GREENX METALS vs. Zoom Video Communications | GREENX METALS vs. OAKTRSPECLENDNEW |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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