Correlation Between Grid Metals and New Age
Can any of the company-specific risk be diversified away by investing in both Grid Metals and New Age 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 Grid Metals and New Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grid Metals Corp and New Age Metals, you can compare the effects of market volatilities on Grid Metals and New Age 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 Grid Metals with a short position of New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Metals and New Age.
Diversification Opportunities for Grid Metals and New Age
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grid and New is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grid Metals Corp and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals and Grid Metals 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 Grid Metals Corp are associated (or correlated) with New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of Grid Metals i.e., Grid Metals and New Age go up and down completely randomly.
Pair Corralation between Grid Metals and New Age
Assuming the 90 days trading horizon Grid Metals Corp is expected to generate 0.95 times more return on investment than New Age. However, Grid Metals Corp is 1.05 times less risky than New Age. It trades about -0.13 of its potential returns per unit of risk. New Age Metals is currently generating about -0.23 per unit of risk. If you would invest 5.00 in Grid Metals Corp on August 26, 2024 and sell it today you would lose (1.00) from holding Grid Metals Corp or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grid Metals Corp vs. New Age Metals
Performance |
| Timeline |
| Grid Metals Corp |
| New Age Metals |
Grid Metals and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Metals and New Age
The main advantage of trading using opposite Grid Metals and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Metals position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| Grid Metals vs. Stillwater Critical Minerals | Grid Metals vs. Gungnir Resources | Grid Metals vs. Golden Pursuit Resources | Grid Metals vs. New Age Metals |
| New Age vs. First Majestic Silver | New Age vs. Ivanhoe Energy | New Age vs. Orezone Gold Corp | New Age vs. Faraday Copper 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 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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