Correlation Between BRIT AMER and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both BRIT AMER 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 BRIT AMER and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and GREENX METALS LTD, you can compare the effects of market volatilities on BRIT AMER 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 BRIT AMER with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and GREENX METALS.
Diversification Opportunities for BRIT AMER and GREENX METALS
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BRIT and GREENX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO 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 BRIT AMER 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 BRIT AMER TOBACCO 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 BRIT AMER i.e., BRIT AMER and GREENX METALS go up and down completely randomly.
Pair Corralation between BRIT AMER and GREENX METALS
Assuming the 90 days trading horizon BRIT AMER is expected to generate 7.03 times less return on investment than GREENX METALS. But when comparing it to its historical volatility, BRIT AMER TOBACCO is 2.61 times less risky than GREENX METALS. It trades about 0.09 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 41.00 in GREENX METALS LTD on October 11, 2024 and sell it today you would earn a total of 4.00 from holding GREENX METALS LTD or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. GREENX METALS LTD
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| GREENX METALS LTD |
BRIT AMER and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and GREENX METALS
The main advantage of trading using opposite BRIT AMER and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER 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.| BRIT AMER vs. TAL Education Group | BRIT AMER vs. CHINA EDUCATION GROUP | BRIT AMER vs. BII Railway Transportation | BRIT AMER vs. DEVRY EDUCATION GRP |
| GREENX METALS vs. Chesapeake Utilities | GREENX METALS vs. Addus HomeCare | GREENX METALS vs. BRIT AMER TOBACCO | GREENX METALS vs. Corporate Office Properties |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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