Correlation Between GreenX Metals and Naked Wines
Can any of the company-specific risk be diversified away by investing in both GreenX Metals and Naked Wines 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 Naked Wines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Naked Wines plc, you can compare the effects of market volatilities on GreenX Metals and Naked Wines 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 Naked Wines. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Naked Wines.
Diversification Opportunities for GreenX Metals and Naked Wines
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenX and Naked is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and Naked Wines plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Wines plc 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 Naked Wines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Wines plc has no effect on the direction of GreenX Metals i.e., GreenX Metals and Naked Wines go up and down completely randomly.
Pair Corralation between GreenX Metals and Naked Wines
Assuming the 90 days trading horizon GreenX Metals is expected to generate 0.3 times more return on investment than Naked Wines. However, GreenX Metals is 3.34 times less risky than Naked Wines. It trades about 0.21 of its potential returns per unit of risk. Naked Wines plc is currently generating about -0.05 per unit of risk. If you would invest 3,400 in GreenX Metals on October 20, 2024 and sell it today you would earn a total of 150.00 from holding GreenX Metals or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. Naked Wines plc
Performance |
| Timeline |
| GreenX Metals |
| Naked Wines plc |
GreenX Metals and Naked Wines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Naked Wines
The main advantage of trading using opposite GreenX Metals and Naked Wines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, Naked Wines 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 Naked Wines will offset losses from the drop in Naked Wines' long position.| GreenX Metals vs. Arrow Electronics | GreenX Metals vs. UNIQA Insurance Group | GreenX Metals vs. Costco Wholesale Corp | GreenX Metals vs. Norwegian Air Shuttle |
| Naked Wines vs. Samsung Electronics Co | Naked Wines vs. Samsung Electronics Co | Naked Wines vs. Toyota Motor Corp | Naked Wines vs. Reliance Industries Ltd |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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