Correlation Between ABACUS STORAGE and Greentech Metals
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Greentech 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 ABACUS STORAGE and Greentech Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Greentech Metals, you can compare the effects of market volatilities on ABACUS STORAGE and Greentech 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 ABACUS STORAGE with a short position of Greentech Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Greentech Metals.
Diversification Opportunities for ABACUS STORAGE and Greentech Metals
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ABACUS and Greentech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Greentech Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentech Metals and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Greentech Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentech Metals has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Greentech Metals go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Greentech Metals
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 6.88 times more return on investment than Greentech Metals. However, ABACUS STORAGE is 6.88 times more volatile than Greentech Metals. It trades about 0.05 of its potential returns per unit of risk. Greentech Metals is currently generating about -0.02 per unit of risk. If you would invest 119.00 in ABACUS STORAGE KING on August 30, 2024 and sell it today you would earn a total of 2.00 from holding ABACUS STORAGE KING or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.68% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Greentech Metals
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Greentech Metals |
ABACUS STORAGE and Greentech Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Greentech Metals
The main advantage of trading using opposite ABACUS STORAGE and Greentech Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Greentech 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 Greentech Metals will offset losses from the drop in Greentech Metals' long position.| ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Champion Iron | ABACUS STORAGE vs. Ridley | ABACUS STORAGE vs. Peel Mining |
| Greentech Metals vs. Northern Star Resources | Greentech Metals vs. Evolution Mining | Greentech Metals vs. Bluescope Steel | Greentech Metals vs. Sandfire Resources NL |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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