Correlation Between Greentech Metals and Global X
Can any of the company-specific risk be diversified away by investing in both Greentech Metals and Global X 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 Greentech Metals and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greentech Metals and Global X Physical, you can compare the effects of market volatilities on Greentech Metals and Global X 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 Greentech Metals with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentech Metals and Global X.
Diversification Opportunities for Greentech Metals and Global X
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greentech and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and Global X Physical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Physical and Greentech 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 Greentech Metals are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Physical has no effect on the direction of Greentech Metals i.e., Greentech Metals and Global X go up and down completely randomly.
Pair Corralation between Greentech Metals and Global X
Assuming the 90 days trading horizon Greentech Metals is expected to under-perform the Global X. In addition to that, Greentech Metals is 6.68 times more volatile than Global X Physical. It trades about -0.18 of its total potential returns per unit of risk. Global X Physical is currently generating about -0.27 per unit of volatility. If you would invest 14,200 in Global X Physical on September 1, 2024 and sell it today you would lose (886.00) from holding Global X Physical or give up 6.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greentech Metals vs. Global X Physical
Performance |
| Timeline |
| Greentech Metals |
| Global X Physical |
Greentech Metals and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greentech Metals and Global X
The main advantage of trading using opposite Greentech Metals and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentech Metals position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Greentech Metals vs. Northern Star Resources | Greentech Metals vs. Evolution Mining | Greentech Metals vs. Bluescope Steel | Greentech Metals vs. Sandfire Resources NL |
| Global X vs. Champion Iron | Global X vs. Australian Dairy Farms | Global X vs. Perpetual Credit Income | Global X vs. Greentech Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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