Correlation Between GREENX METALS and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Woolworths Group 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 Woolworths Group 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 Woolworths Group Limited, you can compare the effects of market volatilities on GREENX METALS and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Woolworths Group.
Diversification Opportunities for GREENX METALS and Woolworths Group
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GREENX and Woolworths is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths Group 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of GREENX METALS i.e., GREENX METALS and Woolworths Group go up and down completely randomly.
Pair Corralation between GREENX METALS and Woolworths Group
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the Woolworths Group. In addition to that, GREENX METALS is 2.4 times more volatile than Woolworths Group Limited. It trades about -0.13 of its total potential returns per unit of risk. Woolworths Group Limited is currently generating about -0.24 per unit of volatility. If you would invest 2,020 in Woolworths Group Limited on August 25, 2024 and sell it today you would lose (190.00) from holding Woolworths Group Limited or give up 9.41% 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. Woolworths Group Limited
Performance |
| Timeline |
| GREENX METALS LTD |
| Woolworths Group |
GREENX METALS and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Woolworths Group
The main advantage of trading using opposite GREENX METALS and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech |
| Woolworths Group vs. DIVERSIFIED ROYALTY | Woolworths Group vs. Chuangs China Investments | Woolworths Group vs. Harmony Gold Mining | Woolworths Group vs. GREENX METALS 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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