Correlation Between Parkd and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Parkd 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 Parkd and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkd and GreenX Metals, you can compare the effects of market volatilities on Parkd 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 Parkd with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkd and GreenX Metals.
Diversification Opportunities for Parkd and GreenX Metals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Parkd and GreenX is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Parkd and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Parkd 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 Parkd 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 Parkd i.e., Parkd and GreenX Metals go up and down completely randomly.
Pair Corralation between Parkd and GreenX Metals
Assuming the 90 days trading horizon Parkd is expected to under-perform the GreenX Metals. In addition to that, Parkd is 1.26 times more volatile than GreenX Metals. It trades about -0.23 of its total potential returns per unit of risk. GreenX Metals is currently generating about -0.27 per unit of volatility. If you would invest 80.00 in GreenX Metals on September 4, 2024 and sell it today you would lose (12.00) from holding GreenX Metals or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Parkd vs. GreenX Metals
Performance |
| Timeline |
| Parkd |
| GreenX Metals |
Parkd and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkd and GreenX Metals
The main advantage of trading using opposite Parkd and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkd 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.| Parkd vs. Aneka Tambang Tbk | Parkd vs. ANZ Group Holdings | Parkd vs. Australia and New | Parkd vs. ANZ Group Holdings |
| GreenX Metals vs. Northern Star Resources | GreenX Metals vs. Evolution Mining | GreenX Metals vs. Bluescope Steel | GreenX Metals vs. Sandfire Resources NL |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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