Correlation Between Anglo Asian and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Anglo Asian 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 Anglo Asian and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Asian Mining and GreenX Metals, you can compare the effects of market volatilities on Anglo Asian 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 Anglo Asian with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and GreenX Metals.
Diversification Opportunities for Anglo Asian and GreenX Metals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anglo and GreenX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Anglo Asian 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 Anglo Asian Mining 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 has no effect on the direction of Anglo Asian i.e., Anglo Asian and GreenX Metals go up and down completely randomly.
Pair Corralation between Anglo Asian and GreenX Metals
Assuming the 90 days trading horizon Anglo Asian is expected to generate 4.05 times less return on investment than GreenX Metals. In addition to that, Anglo Asian is 2.38 times more volatile than GreenX Metals. It trades about 0.02 of its total potential returns per unit of risk. GreenX Metals is currently generating about 0.21 per unit of volatility. If you would invest 3,400 in GreenX Metals on October 20, 2024 and sell it today you would earn a total of 150.00 from holding GreenX Metals or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. GreenX Metals
Performance |
| Timeline |
| Anglo Asian Mining |
| GreenX Metals |
Anglo Asian and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and GreenX Metals
The main advantage of trading using opposite Anglo Asian and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian 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' long position.| Anglo Asian vs. Zegona Communications Plc | Anglo Asian vs. Arrow Electronics | Anglo Asian vs. Summit Materials Cl | Anglo Asian vs. Vulcan Materials Co |
| GreenX Metals vs. Arrow Electronics | GreenX Metals vs. UNIQA Insurance Group | GreenX Metals vs. Costco Wholesale Corp | GreenX Metals vs. Norwegian Air Shuttle |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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