Correlation Between GreenX Metals and Leeuwin Metals
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and Leeuwin Metals 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 Leeuwin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Leeuwin Metals, you can compare the effects of market volatilities on GreenX Metals and Leeuwin Metals 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 Leeuwin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Leeuwin Metals.
Diversification Opportunities for GreenX Metals and Leeuwin Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenX and Leeuwin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Leeuwin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leeuwin Metals 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 Leeuwin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leeuwin Metals has no effect on the direction of GreenX Metals i.e., GreenX Metals and Leeuwin Metals go up and down completely randomly.
Pair Corralation between GreenX Metals and Leeuwin Metals
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Leeuwin Metals. In addition to that, GreenX Metals is 3.07 times more volatile than Leeuwin Metals. It trades about -0.3 of its total potential returns per unit of risk. Leeuwin Metals is currently generating about 0.0 per unit of volatility. If you would invest 7.30 in Leeuwin Metals on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Leeuwin Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. Leeuwin Metals
Performance |
| Timeline |
| GreenX Metals |
| Leeuwin Metals |
GreenX Metals and Leeuwin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Leeuwin Metals
The main advantage of trading using opposite GreenX Metals and Leeuwin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, Leeuwin Metals 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 Leeuwin Metals will offset losses from the drop in Leeuwin Metals' long position.| GreenX Metals vs. Northern Star Resources | GreenX Metals vs. Evolution Mining | GreenX Metals vs. Bluescope Steel | GreenX Metals vs. De Grey Mining |
| Leeuwin Metals vs. Northern Star Resources | Leeuwin Metals vs. Evolution Mining | Leeuwin Metals vs. Bluescope Steel | Leeuwin Metals vs. De Grey Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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