Correlation Between Greentech Metals and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both Greentech Metals and BetaShares Global 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 BetaShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greentech Metals and BetaShares Global Government, you can compare the effects of market volatilities on Greentech Metals and BetaShares Global 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 BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentech Metals and BetaShares Global.
Diversification Opportunities for Greentech Metals and BetaShares Global
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greentech and BetaShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and BetaShares Global Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global 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 BetaShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Global has no effect on the direction of Greentech Metals i.e., Greentech Metals and BetaShares Global go up and down completely randomly.
Pair Corralation between Greentech Metals and BetaShares Global
Assuming the 90 days trading horizon Greentech Metals is expected to generate 14.96 times more return on investment than BetaShares Global. However, Greentech Metals is 14.96 times more volatile than BetaShares Global Government. It trades about 0.04 of its potential returns per unit of risk. BetaShares Global Government is currently generating about -0.02 per unit of risk. If you would invest 14.00 in Greentech Metals on September 1, 2024 and sell it today you would lose (5.50) from holding Greentech Metals or give up 39.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greentech Metals vs. BetaShares Global Government
Performance |
| Timeline |
| Greentech Metals |
| BetaShares Global |
Greentech Metals and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greentech Metals and BetaShares Global
The main advantage of trading using opposite Greentech Metals and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentech Metals position performs unexpectedly, BetaShares Global 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 BetaShares Global will offset losses from the drop in BetaShares Global'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 |
| BetaShares Global vs. Champion Iron | BetaShares Global vs. Australian Dairy Farms | BetaShares Global vs. Perpetual Credit Income | BetaShares Global 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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