Correlation Between GREENX METALS and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on GREENX METALS and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Plastic Omnium.
Diversification Opportunities for GREENX METALS and Plastic Omnium
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GREENX and Plastic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of GREENX METALS i.e., GREENX METALS and Plastic Omnium go up and down completely randomly.
Pair Corralation between GREENX METALS and Plastic Omnium
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.33 times more return on investment than Plastic Omnium. However, GREENX METALS is 1.33 times more volatile than Plastic Omnium. It trades about 0.35 of its potential returns per unit of risk. Plastic Omnium is currently generating about 0.08 per unit of risk. If you would invest 39.00 in GREENX METALS LTD on October 13, 2024 and sell it today you would earn a total of 6.00 from holding GREENX METALS LTD or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GREENX METALS LTD vs. Plastic Omnium
Performance |
| Timeline |
| GREENX METALS LTD |
| Plastic Omnium |
GREENX METALS and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Plastic Omnium
The main advantage of trading using opposite GREENX METALS and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| GREENX METALS vs. ZURICH INSURANCE GROUP | GREENX METALS vs. Molina Healthcare | GREENX METALS vs. Zurich Insurance Group | GREENX METALS vs. EPSILON HEALTHCARE LTD |
| Plastic Omnium vs. PLAYMATES TOYS | Plastic Omnium vs. Addus HomeCare | Plastic Omnium vs. alstria office REIT AG | Plastic Omnium vs. ADDUS HOMECARE |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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