Correlation Between GreenX Metals and Australian Critical
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and Australian Critical 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 GreenX Metals and Australian Critical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Australian Critical Minerals, you can compare the effects of market volatilities on GreenX Metals and Australian Critical 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 GreenX Metals with a short position of Australian Critical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Australian Critical.
Diversification Opportunities for GreenX Metals and Australian Critical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GreenX and Australian is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Australian Critical Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Critical and GreenX 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 GreenX Metals are associated (or correlated) with Australian Critical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Critical has no effect on the direction of GreenX Metals i.e., GreenX Metals and Australian Critical go up and down completely randomly.
Pair Corralation between GreenX Metals and Australian Critical
Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.51 times more return on investment than Australian Critical. However, GreenX Metals is 1.96 times less risky than Australian Critical. It trades about -0.03 of its potential returns per unit of risk. Australian Critical Minerals is currently generating about -0.05 per unit of risk. If you would invest 97.00 in GreenX Metals on September 14, 2024 and sell it today you would lose (31.00) from holding GreenX Metals or give up 31.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
GreenX Metals vs. Australian Critical Minerals
Performance |
| Timeline |
| GreenX Metals |
| Australian Critical |
GreenX Metals and Australian Critical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Australian Critical
The main advantage of trading using opposite GreenX Metals and Australian Critical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, Australian Critical 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 Australian Critical will offset losses from the drop in Australian Critical's long position.| GreenX Metals vs. Northern Star Resources | GreenX Metals vs. Evolution Mining | GreenX Metals vs. Bluescope Steel | GreenX Metals vs. Sandfire Resources NL |
| Australian Critical vs. Centuria Industrial Reit | Australian Critical vs. GreenX Metals | Australian Critical vs. Patriot Battery Metals | Australian Critical vs. Aeon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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