Correlation Between GreenX Metals and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and Rheinmetall 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 Rheinmetall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Rheinmetall AG, you can compare the effects of market volatilities on GreenX Metals and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Rheinmetall.
Diversification Opportunities for GreenX Metals and Rheinmetall
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GreenX and Rheinmetall is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of GreenX Metals i.e., GreenX Metals and Rheinmetall go up and down completely randomly.
Pair Corralation between GreenX Metals and Rheinmetall
Assuming the 90 days trading horizon GreenX Metals is expected to generate 17.17 times less return on investment than Rheinmetall. In addition to that, GreenX Metals is 1.72 times more volatile than Rheinmetall AG. It trades about 0.01 of its total potential returns per unit of risk. Rheinmetall AG is currently generating about 0.15 per unit of volatility. If you would invest 49,600 in Rheinmetall AG on October 26, 2024 and sell it today you would earn a total of 23,950 from holding Rheinmetall AG or generate 48.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. Rheinmetall AG
Performance |
| Timeline |
| GreenX Metals |
| Rheinmetall AG |
GreenX Metals and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Rheinmetall
The main advantage of trading using opposite GreenX Metals and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Ferrexpo PLC | GreenX Metals vs. Atalaya Mining |
| Rheinmetall vs. GreenX Metals | Rheinmetall vs. Vulcan Materials Co | Rheinmetall vs. Summit Materials Cl | Rheinmetall vs. Compagnie Plastic Omnium |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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