Correlation Between Step One and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Step One 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 Step One and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and GreenX Metals, you can compare the effects of market volatilities on Step One 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 Step One with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and GreenX Metals.
Diversification Opportunities for Step One and GreenX Metals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Step and GreenX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Step One 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 Step One Clothing 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 Step One i.e., Step One and GreenX Metals go up and down completely randomly.
Pair Corralation between Step One and GreenX Metals
Assuming the 90 days trading horizon Step One Clothing is expected to generate 1.29 times more return on investment than GreenX Metals. However, Step One is 1.29 times more volatile than GreenX Metals. It trades about 0.1 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.02 per unit of risk. If you would invest 23.00 in Step One Clothing on August 26, 2024 and sell it today you would earn a total of 112.00 from holding Step One Clothing or generate 486.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Step One Clothing vs. GreenX Metals
Performance |
| Timeline |
| Step One Clothing |
| GreenX Metals |
Step One and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Step One and GreenX Metals
The main advantage of trading using opposite Step One and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One 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.| Step One vs. GreenX Metals | Step One vs. Cleanaway Waste Management | Step One vs. Sky Metals | Step One vs. Nine Entertainment Co |
| GreenX Metals vs. Treasury Wine Estates | GreenX Metals vs. Centuria Industrial Reit | GreenX Metals vs. Aeris Environmental | 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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