Correlation Between Carlton Investments and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Carlton Investments 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 Carlton Investments and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlton Investments and GreenX Metals, you can compare the effects of market volatilities on Carlton Investments 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 Carlton Investments with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and GreenX Metals.
Diversification Opportunities for Carlton Investments and GreenX Metals
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carlton and GreenX is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Carlton Investments 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 Carlton Investments 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 Carlton Investments i.e., Carlton Investments and GreenX Metals go up and down completely randomly.
Pair Corralation between Carlton Investments and GreenX Metals
Assuming the 90 days trading horizon Carlton Investments is expected to generate 0.21 times more return on investment than GreenX Metals. However, Carlton Investments is 4.7 times less risky than GreenX Metals. It trades about 0.02 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.01 per unit of risk. If you would invest 3,040 in Carlton Investments on August 31, 2024 and sell it today you would earn a total of 30.00 from holding Carlton Investments or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlton Investments vs. GreenX Metals
Performance |
| Timeline |
| Carlton Investments |
| GreenX Metals |
Carlton Investments and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlton Investments and GreenX Metals
The main advantage of trading using opposite Carlton Investments and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlton Investments 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.| Carlton Investments vs. Australian Foundation Investment | Carlton Investments vs. GQG Partners DRC | Carlton Investments vs. MFF Capital Investments | Carlton Investments vs. Wam Leaders |
| GreenX Metals vs. Northern Star Resources | GreenX Metals vs. Evolution Mining | GreenX Metals vs. Bluescope Steel | GreenX Metals vs. Perseus 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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