Correlation Between Central Asia and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and GreenX Metals, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and GreenX Metals.
Diversification Opportunities for Central Asia and GreenX Metals
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and GreenX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and GreenX Metals go up and down completely randomly.
Pair Corralation between Central Asia and GreenX Metals
Assuming the 90 days trading horizon Central Asia Metals is expected to generate 1.71 times more return on investment than GreenX Metals. However, Central Asia is 1.71 times more volatile than GreenX Metals. It trades about 0.14 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.21 per unit of risk. If you would invest 15,140 in Central Asia Metals on October 20, 2024 and sell it today you would earn a total of 740.00 from holding Central Asia Metals or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. GreenX Metals
Performance |
| Timeline |
| Central Asia Metals |
| GreenX Metals |
Central Asia and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and GreenX Metals
The main advantage of trading using opposite Central Asia and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. InterContinental Hotels Group | Central Asia vs. Rosslyn Data Technologies | Central Asia vs. Commerzbank AG | Central Asia vs. St Galler Kantonalbank |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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