Correlation Between GREENX METALS and Magna International
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on GREENX METALS and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Magna International.
Diversification Opportunities for GREENX METALS and Magna International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GREENX and Magna is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of GREENX METALS i.e., GREENX METALS and Magna International go up and down completely randomly.
Pair Corralation between GREENX METALS and Magna International
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 2.39 times more return on investment than Magna International. However, GREENX METALS is 2.39 times more volatile than Magna International. It trades about 0.18 of its potential returns per unit of risk. Magna International is currently generating about -0.09 per unit of risk. If you would invest 42.00 in GREENX METALS LTD on November 3, 2024 and sell it today you would earn a total of 6.00 from holding GREENX METALS LTD or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Magna International
Performance |
| Timeline |
| GREENX METALS LTD |
| Magna International |
GREENX METALS and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Magna International
The main advantage of trading using opposite GREENX METALS and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. MONGOLIA ENERG HD 02 | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. Intel |
| Magna International vs. United Insurance Holdings | Magna International vs. ZURICH INSURANCE GROUP | Magna International vs. Grand Canyon Education | Magna International vs. IDP EDUCATION LTD |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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