Correlation Between Greenroc Mining and Alliance Data
Can any of the company-specific risk be diversified away by investing in both Greenroc Mining and Alliance Data 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 Greenroc Mining and Alliance Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenroc Mining PLC and Alliance Data Systems, you can compare the effects of market volatilities on Greenroc Mining and Alliance Data 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 Greenroc Mining with a short position of Alliance Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenroc Mining and Alliance Data.
Diversification Opportunities for Greenroc Mining and Alliance Data
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greenroc and Alliance is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Greenroc Mining PLC and Alliance Data Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Data Systems and Greenroc Mining 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 Greenroc Mining PLC are associated (or correlated) with Alliance Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Data Systems has no effect on the direction of Greenroc Mining i.e., Greenroc Mining and Alliance Data go up and down completely randomly.
Pair Corralation between Greenroc Mining and Alliance Data
Assuming the 90 days trading horizon Greenroc Mining PLC is expected to under-perform the Alliance Data. In addition to that, Greenroc Mining is 1.06 times more volatile than Alliance Data Systems. It trades about -0.04 of its total potential returns per unit of risk. Alliance Data Systems is currently generating about 0.17 per unit of volatility. If you would invest 5,091 in Alliance Data Systems on August 29, 2024 and sell it today you would earn a total of 798.00 from holding Alliance Data Systems or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenroc Mining PLC vs. Alliance Data Systems
Performance |
| Timeline |
| Greenroc Mining PLC |
| Alliance Data Systems |
Greenroc Mining and Alliance Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenroc Mining and Alliance Data
The main advantage of trading using opposite Greenroc Mining and Alliance Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenroc Mining position performs unexpectedly, Alliance Data 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 Alliance Data will offset losses from the drop in Alliance Data's long position.| Greenroc Mining vs. Givaudan SA | Greenroc Mining vs. Antofagasta PLC | Greenroc Mining vs. Centamin PLC | Greenroc Mining vs. Atalaya Mining |
| Alliance Data vs. Samsung Electronics Co | Alliance Data vs. Samsung Electronics Co | Alliance Data vs. Hyundai Motor | Alliance Data vs. Toyota Motor 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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