Correlation Between LPP SA and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both LPP SA 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 LPP SA and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPP SA and GreenX Metals, you can compare the effects of market volatilities on LPP SA 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 LPP SA with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPP SA and GreenX Metals.
Diversification Opportunities for LPP SA and GreenX Metals
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPP and GreenX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LPP SA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and LPP SA 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 LPP SA 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 LPP SA i.e., LPP SA and GreenX Metals go up and down completely randomly.
Pair Corralation between LPP SA and GreenX Metals
Assuming the 90 days trading horizon LPP SA is expected to generate 0.97 times more return on investment than GreenX Metals. However, LPP SA is 1.03 times less risky than GreenX Metals. It trades about 0.32 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.12 per unit of risk. If you would invest 1,618,000 in LPP SA on November 28, 2024 and sell it today you would earn a total of 187,000 from holding LPP SA or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPP SA vs. GreenX Metals
Performance |
| Timeline |
| LPP SA |
| GreenX Metals |
LPP SA and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPP SA and GreenX Metals
The main advantage of trading using opposite LPP SA and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPP SA 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.| LPP SA vs. PMPG Polskie Media | LPP SA vs. Alior Bank SA | LPP SA vs. Examobile SA | LPP SA vs. Globe Trade Centre |
| GreenX Metals vs. Mercator Medical SA | GreenX Metals vs. Road Studio SA | GreenX Metals vs. Globe Trade Centre | GreenX Metals vs. Datawalk SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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