Correlation Between LBG Media and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both LBG Media and GreenX Metals 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 LBG Media and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LBG Media PLC and GreenX Metals, you can compare the effects of market volatilities on LBG Media and GreenX Metals 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 LBG Media with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG Media and GreenX Metals.
Diversification Opportunities for LBG Media and GreenX Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LBG and GreenX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding LBG Media PLC and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and LBG Media 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 LBG Media PLC are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of LBG Media i.e., LBG Media and GreenX Metals go up and down completely randomly.
Pair Corralation between LBG Media and GreenX Metals
Assuming the 90 days trading horizon LBG Media PLC is expected to under-perform the GreenX Metals. But the stock apears to be less risky and, when comparing its historical volatility, LBG Media PLC is 1.2 times less risky than GreenX Metals. The stock trades about -0.09 of its potential returns per unit of risk. The GreenX Metals is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,400 in GreenX Metals on October 23, 2024 and sell it today you would earn a total of 400.00 from holding GreenX Metals or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LBG Media PLC vs. GreenX Metals
Performance |
| Timeline |
| LBG Media PLC |
| GreenX Metals |
LBG Media and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LBG Media and GreenX Metals
The main advantage of trading using opposite LBG Media and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LBG Media position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| LBG Media vs. Toyota Motor Corp | LBG Media vs. SoftBank Group Corp | LBG Media vs. Halyk Bank of | LBG Media vs. Samsung Electronics Co |
| GreenX Metals vs. Advanced Medical Solutions | GreenX Metals vs. AMG Advanced Metallurgical | GreenX Metals vs. LBG Media PLC | GreenX Metals vs. Medical Properties Trust |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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