Correlation Between Strickland Metals and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Strickland Metals 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 Strickland Metals and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strickland Metals and GreenX Metals, you can compare the effects of market volatilities on Strickland Metals 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 Strickland Metals with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strickland Metals and GreenX Metals.
Diversification Opportunities for Strickland Metals and GreenX Metals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strickland and GreenX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Strickland 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 Strickland Metals 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 Strickland Metals i.e., Strickland Metals and GreenX Metals go up and down completely randomly.
Pair Corralation between Strickland Metals and GreenX Metals
Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the GreenX Metals. In addition to that, Strickland Metals is 1.14 times more volatile than GreenX Metals. It trades about -0.1 of its total potential returns per unit of risk. GreenX Metals is currently generating about -0.02 per unit of volatility. If you would invest 67.00 in GreenX Metals on August 29, 2024 and sell it today you would lose (4.00) from holding GreenX Metals or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strickland Metals vs. GreenX Metals
Performance |
| Timeline |
| Strickland Metals |
| GreenX Metals |
Strickland Metals and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strickland Metals and GreenX Metals
The main advantage of trading using opposite Strickland Metals and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strickland Metals 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.| Strickland Metals vs. Northern Star Resources | Strickland Metals vs. Evolution Mining | Strickland Metals vs. Bluescope Steel | Strickland Metals vs. Sandfire Resources NL |
| GreenX Metals vs. National Storage REIT | GreenX Metals vs. Red Hill Iron | GreenX Metals vs. Hawsons Iron | GreenX Metals vs. Seven West Media |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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