Correlation Between GREENX METALS and Northern Data
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Northern Data 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 Northern Data 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 Northern Data AG, you can compare the effects of market volatilities on GREENX METALS and Northern Data 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 Northern Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Northern Data.
Diversification Opportunities for GREENX METALS and Northern Data
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GREENX and Northern is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Northern Data AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Data AG 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 Northern Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Data AG has no effect on the direction of GREENX METALS i.e., GREENX METALS and Northern Data go up and down completely randomly.
Pair Corralation between GREENX METALS and Northern Data
Assuming the 90 days trading horizon GREENX METALS is expected to generate 4.77 times less return on investment than Northern Data. But when comparing it to its historical volatility, GREENX METALS LTD is 1.33 times less risky than Northern Data. It trades about 0.06 of its potential returns per unit of risk. Northern Data AG is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,250 in Northern Data AG on October 20, 2024 and sell it today you would earn a total of 650.00 from holding Northern Data AG or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Northern Data AG
Performance |
| Timeline |
| GREENX METALS LTD |
| Northern Data AG |
GREENX METALS and Northern Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Northern Data
The main advantage of trading using opposite GREENX METALS and Northern Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Northern Data 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 Northern Data will offset losses from the drop in Northern Data's long position.| GREENX METALS vs. Commercial Vehicle Group | GREENX METALS vs. VARIOUS EATERIES LS | GREENX METALS vs. AEGEAN AIRLINES | GREENX METALS vs. Nok Airlines PCL |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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