Correlation Between Now and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Now and Grid 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 Now and Grid Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and Grid Metals Corp, you can compare the effects of market volatilities on Now and Grid 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 Now with a short position of Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Grid Metals.
Diversification Opportunities for Now and Grid Metals
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Now and Grid is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp and Now 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 Now Inc are associated (or correlated) with Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Now i.e., Now and Grid Metals go up and down completely randomly.
Pair Corralation between Now and Grid Metals
Given the investment horizon of 90 days Now Inc is expected to generate 0.37 times more return on investment than Grid Metals. However, Now Inc is 2.71 times less risky than Grid Metals. It trades about 0.07 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 969.00 in Now Inc on November 9, 2024 and sell it today you would earn a total of 461.00 from holding Now Inc or generate 47.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.89% |
| Values | Daily Returns |
Now Inc vs. Grid Metals Corp
Performance |
| Timeline |
| Now Inc |
| Grid Metals Corp |
Now and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and Grid Metals
The main advantage of trading using opposite Now and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now position performs unexpectedly, Grid 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 Grid Metals will offset losses from the drop in Grid Metals' long position.| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
| Grid Metals vs. Great Western Minerals | Grid Metals vs. StrikePoint Gold | Grid Metals vs. Silver Elephant Mining | Grid Metals vs. Eskay Mining Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
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| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |