Correlation Between Grid Metals and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both Grid Metals and Winsome Resources 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 Grid Metals and Winsome Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grid Metals Corp and Winsome Resources Limited, you can compare the effects of market volatilities on Grid Metals and Winsome Resources 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 Grid Metals with a short position of Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Metals and Winsome Resources.
Diversification Opportunities for Grid Metals and Winsome Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grid and Winsome is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grid Metals Corp and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome Resources and Grid 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 Grid Metals Corp are associated (or correlated) with Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Grid Metals i.e., Grid Metals and Winsome Resources go up and down completely randomly.
Pair Corralation between Grid Metals and Winsome Resources
Assuming the 90 days horizon Grid Metals Corp is expected to under-perform the Winsome Resources. In addition to that, Grid Metals is 8.41 times more volatile than Winsome Resources Limited. It trades about -0.15 of its total potential returns per unit of risk. Winsome Resources Limited is currently generating about 0.22 per unit of volatility. If you would invest 30.00 in Winsome Resources Limited on November 5, 2024 and sell it today you would earn a total of 1.00 from holding Winsome Resources Limited or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grid Metals Corp vs. Winsome Resources Limited
Performance |
| Timeline |
| Grid Metals Corp |
| Winsome Resources |
Grid Metals and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Metals and Winsome Resources
The main advantage of trading using opposite Grid Metals and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Metals position performs unexpectedly, Winsome Resources 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 Winsome Resources will offset losses from the drop in Winsome Resources' long position.The idea behind Grid Metals Corp and Winsome Resources Limited 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.| Winsome Resources vs. Air Products and | Winsome Resources vs. Dave Busters Entertainment | Winsome Resources vs. CF Industries Holdings | Winsome Resources vs. The Mosaic |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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