Correlation Between KAGA EL and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both KAGA EL and GREENX METALS 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 KAGA EL and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAGA EL LTD and GREENX METALS LTD, you can compare the effects of market volatilities on KAGA EL and GREENX METALS 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 KAGA EL with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAGA EL and GREENX METALS.
Diversification Opportunities for KAGA EL and GREENX METALS
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between KAGA and GREENX is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding KAGA EL LTD and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and KAGA EL 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 KAGA EL LTD are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of KAGA EL i.e., KAGA EL and GREENX METALS go up and down completely randomly.
Pair Corralation between KAGA EL and GREENX METALS
Assuming the 90 days horizon KAGA EL LTD is expected to generate 0.29 times more return on investment than GREENX METALS. However, KAGA EL LTD is 3.41 times less risky than GREENX METALS. It trades about -0.04 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.17 per unit of risk. If you would invest 1,660 in KAGA EL LTD on August 24, 2024 and sell it today you would lose (20.00) from holding KAGA EL LTD or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAGA EL LTD vs. GREENX METALS LTD
Performance |
| Timeline |
| KAGA EL LTD |
| GREENX METALS LTD |
KAGA EL and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAGA EL and GREENX METALS
The main advantage of trading using opposite KAGA EL and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAGA EL position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| KAGA EL vs. GREENX METALS LTD | KAGA EL vs. Japan Medical Dynamic | KAGA EL vs. Merit Medical Systems | KAGA EL vs. MCEWEN MINING INC |
| GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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