Correlation Between Greentech Metals and ETFS Ultra
Can any of the company-specific risk be diversified away by investing in both Greentech Metals and ETFS Ultra 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 ETFS Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greentech Metals and ETFS Ultra Long, you can compare the effects of market volatilities on Greentech Metals and ETFS Ultra 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 ETFS Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentech Metals and ETFS Ultra.
Diversification Opportunities for Greentech Metals and ETFS Ultra
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Greentech and ETFS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and ETFS Ultra Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Ultra Long 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 ETFS Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Ultra Long has no effect on the direction of Greentech Metals i.e., Greentech Metals and ETFS Ultra go up and down completely randomly.
Pair Corralation between Greentech Metals and ETFS Ultra
Assuming the 90 days trading horizon Greentech Metals is expected to under-perform the ETFS Ultra. In addition to that, Greentech Metals is 2.14 times more volatile than ETFS Ultra Long. It trades about -0.07 of its total potential returns per unit of risk. ETFS Ultra Long is currently generating about 0.05 per unit of volatility. If you would invest 875.00 in ETFS Ultra Long on September 1, 2024 and sell it today you would earn a total of 180.00 from holding ETFS Ultra Long or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Greentech Metals vs. ETFS Ultra Long
Performance |
| Timeline |
| Greentech Metals |
| ETFS Ultra Long |
Greentech Metals and ETFS Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greentech Metals and ETFS Ultra
The main advantage of trading using opposite Greentech Metals and ETFS Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentech Metals position performs unexpectedly, ETFS Ultra 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 ETFS Ultra will offset losses from the drop in ETFS Ultra'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 |
| ETFS Ultra vs. Champion Iron | ETFS Ultra vs. Australian Dairy Farms | ETFS Ultra vs. Perpetual Credit Income | ETFS Ultra 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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