Correlation Between GreenX Metals and ED Invest

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Can any of the company-specific risk be diversified away by investing in both GreenX Metals and ED Invest 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 ED Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and ED Invest SA, you can compare the effects of market volatilities on GreenX Metals and ED Invest 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 ED Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and ED Invest.

Diversification Opportunities for GreenX Metals and ED Invest

GreenXEDIDiversified AwayGreenXEDIDiversified Away100%
0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between GreenX and EDI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and ED Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Invest SA 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 ED Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Invest SA has no effect on the direction of GreenX Metals i.e., GreenX Metals and ED Invest go up and down completely randomly.

Pair Corralation between GreenX Metals and ED Invest

Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the ED Invest. In addition to that, GreenX Metals is 1.33 times more volatile than ED Invest SA. It trades about -0.1 of its total potential returns per unit of risk. ED Invest SA is currently generating about 0.1 per unit of volatility. If you would invest  640.00  in ED Invest SA on November 30, 2024 and sell it today you would earn a total of  16.00  from holding ED Invest SA or generate 2.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

GreenX Metals  vs.  ED Invest SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15GRX EDI
       Timeline  
GreenX Metals 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenX Metals may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.71.81.922.1
ED Invest SA 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ED Invest SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, ED Invest is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.45.65.866.26.46.66.8

GreenX Metals and ED Invest Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.4-5.54-3.69-1.830.01.853.775.697.619.53 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15GRX EDI
       Returns  

Pair Trading with GreenX Metals and ED Invest

The main advantage of trading using opposite GreenX Metals and ED Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals position performs unexpectedly, ED Invest 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 ED Invest will offset losses from the drop in ED Invest's long position.
The idea behind GreenX Metals and ED Invest SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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