Correlation Between GREENX METALS and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on GREENX METALS and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Insurance Australia.
Diversification Opportunities for GREENX METALS and Insurance Australia
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GREENX and Insurance is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of GREENX METALS i.e., GREENX METALS and Insurance Australia go up and down completely randomly.
Pair Corralation between GREENX METALS and Insurance Australia
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 2.82 times more return on investment than Insurance Australia. However, GREENX METALS is 2.82 times more volatile than Insurance Australia Group. It trades about 0.1 of its potential returns per unit of risk. Insurance Australia Group is currently generating about -0.02 per unit of risk. If you would invest 37.00 in GREENX METALS LTD on September 25, 2024 and sell it today you would earn a total of 3.00 from holding GREENX METALS LTD or generate 8.11% 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. Insurance Australia Group
Performance |
| Timeline |
| GREENX METALS LTD |
| Insurance Australia |
GREENX METALS and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Insurance Australia
The main advantage of trading using opposite GREENX METALS and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. MONGOLIAN MINING CRPREGS | GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. AJ LUCAS GROUP |
| Insurance Australia vs. CN MODERN DAIRY | Insurance Australia vs. Ross Stores | Insurance Australia vs. Caseys General Stores | Insurance Australia vs. Tyson Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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