Correlation Between GreenX Metals and Volkswagen
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and Volkswagen 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 Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Volkswagen AG, you can compare the effects of market volatilities on GreenX Metals and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Volkswagen.
Diversification Opportunities for GreenX Metals and Volkswagen
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between GreenX and Volkswagen is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of GreenX Metals i.e., GreenX Metals and Volkswagen go up and down completely randomly.
Pair Corralation between GreenX Metals and Volkswagen
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Volkswagen. In addition to that, GreenX Metals is 1.3 times more volatile than Volkswagen AG. It trades about -0.03 of its total potential returns per unit of risk. Volkswagen AG is currently generating about 0.23 per unit of volatility. If you would invest 8,593 in Volkswagen AG on September 15, 2024 and sell it today you would earn a total of 570.00 from holding Volkswagen AG or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. Volkswagen AG
Performance |
| Timeline |
| GreenX Metals |
| Volkswagen AG |
GreenX Metals and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Volkswagen
The main advantage of trading using opposite GreenX Metals and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Ferrexpo PLC | GreenX Metals vs. Atalaya Mining |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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