Correlation Between Bio Gene and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Bio Gene 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 Bio Gene and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Gene Technology and GreenX Metals, you can compare the effects of market volatilities on Bio Gene 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 Bio Gene with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Gene and GreenX Metals.
Diversification Opportunities for Bio Gene and GreenX Metals
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bio and GreenX is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bio Gene Technology and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Bio Gene 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 Bio Gene Technology 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 Bio Gene i.e., Bio Gene and GreenX Metals go up and down completely randomly.
Pair Corralation between Bio Gene and GreenX Metals
Assuming the 90 days trading horizon Bio Gene Technology is expected to under-perform the GreenX Metals. In addition to that, Bio Gene is 2.28 times more volatile than GreenX Metals. It trades about -0.2 of its total potential returns per unit of risk. GreenX Metals is currently generating about -0.3 per unit of volatility. If you would invest 80.00 in GreenX Metals on August 31, 2024 and sell it today you would lose (13.00) from holding GreenX Metals or give up 16.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Gene Technology vs. GreenX Metals
Performance |
| Timeline |
| Bio Gene Technology |
| GreenX Metals |
Bio Gene and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Gene and GreenX Metals
The main advantage of trading using opposite Bio Gene and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Gene 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.| Bio Gene vs. Northern Star Resources | Bio Gene vs. Evolution Mining | Bio Gene vs. Bluescope Steel | Bio Gene vs. De Grey Mining |
| GreenX Metals vs. Northern Star Resources | GreenX Metals vs. Evolution Mining | GreenX Metals vs. Bluescope Steel | GreenX Metals vs. De Grey Mining |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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