Correlation Between GREENX METALS and FARO Technologies
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and FARO Technologies 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 FARO Technologies 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 FARO Technologies, you can compare the effects of market volatilities on GREENX METALS and FARO Technologies 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 FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and FARO Technologies.
Diversification Opportunities for GREENX METALS and FARO Technologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENX and FARO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies 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 FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of GREENX METALS i.e., GREENX METALS and FARO Technologies go up and down completely randomly.
Pair Corralation between GREENX METALS and FARO Technologies
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the FARO Technologies. In addition to that, GREENX METALS is 2.35 times more volatile than FARO Technologies. It trades about -0.06 of its total potential returns per unit of risk. FARO Technologies is currently generating about -0.02 per unit of volatility. If you would invest 2,620 in FARO Technologies on September 13, 2024 and sell it today you would lose (40.00) from holding FARO Technologies or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. FARO Technologies
Performance |
| Timeline |
| GREENX METALS LTD |
| FARO Technologies |
GREENX METALS and FARO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and FARO Technologies
The main advantage of trading using opposite GREENX METALS and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. SIVERS SEMICONDUCTORS AB | GREENX METALS vs. Norsk Hydro ASA | GREENX METALS vs. Reliance Steel Aluminum |
| FARO Technologies vs. HEXAGON AB ADR1 | FARO Technologies vs. Superior Plus Corp | FARO Technologies vs. SIVERS SEMICONDUCTORS AB | FARO Technologies vs. NorAm Drilling AS |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance |