Correlation Between PT Steel and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both PT Steel 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 PT Steel and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Steel Pipe and GREENX METALS LTD, you can compare the effects of market volatilities on PT Steel 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 PT Steel with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Steel and GREENX METALS.
Diversification Opportunities for PT Steel and GREENX METALS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between S08 and GREENX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Steel Pipe and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and PT Steel 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 PT Steel Pipe 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 LTD has no effect on the direction of PT Steel i.e., PT Steel and GREENX METALS go up and down completely randomly.
Pair Corralation between PT Steel and GREENX METALS
Assuming the 90 days horizon PT Steel Pipe is expected to under-perform the GREENX METALS. In addition to that, PT Steel is 3.24 times more volatile than GREENX METALS LTD. It trades about -0.02 of its total potential returns per unit of risk. GREENX METALS LTD is currently generating about 0.11 per unit of volatility. If you would invest 41.00 in GREENX METALS LTD on October 10, 2024 and sell it today you would earn a total of 2.00 from holding GREENX METALS LTD or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Steel Pipe vs. GREENX METALS LTD
Performance |
| Timeline |
| PT Steel Pipe |
| GREENX METALS LTD |
PT Steel and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Steel and GREENX METALS
The main advantage of trading using opposite PT Steel and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Steel 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's long position.| PT Steel vs. Take Two Interactive Software | PT Steel vs. X FAB Silicon Foundries | PT Steel vs. Elmos Semiconductor SE | PT Steel vs. Hua Hong Semiconductor |
| GREENX METALS vs. Gol Intelligent Airlines | GREENX METALS vs. Astral Foods Limited | GREENX METALS vs. Performance Food Group | GREENX METALS vs. China Eastern Airlines |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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