Correlation Between GreenX Metals and GoldMining
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and GoldMining, you can compare the effects of market volatilities on GreenX Metals and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and GoldMining.
Diversification Opportunities for GreenX Metals and GoldMining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenX and GoldMining is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of GreenX Metals i.e., GreenX Metals and GoldMining go up and down completely randomly.
Pair Corralation between GreenX Metals and GoldMining
Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.77 times more return on investment than GoldMining. However, GreenX Metals is 1.3 times less risky than GoldMining. It trades about 0.02 of its potential returns per unit of risk. GoldMining is currently generating about -0.04 per unit of risk. If you would invest 3,300 in GreenX Metals on August 26, 2024 and sell it today you would earn a total of 150.00 from holding GreenX Metals or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 35.47% |
| Values | Daily Returns |
GreenX Metals vs. GoldMining
Performance |
| Timeline |
| GreenX Metals |
| GoldMining |
GreenX Metals and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and GoldMining
The main advantage of trading using opposite GreenX Metals and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| GreenX Metals vs. Spirent Communications plc | GreenX Metals vs. European Metals Holdings | GreenX Metals vs. Zoom Video Communications | GreenX Metals vs. Cornish Metals |
| GoldMining vs. JB Hunt Transport | GoldMining vs. Veolia Environnement VE | GoldMining vs. Ironveld Plc | GoldMining vs. Schroders Investment Trusts |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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