Correlation Between Green Cross and Moonbae Steel

Can any of the company-specific risk be diversified away by investing in both Green Cross and Moonbae Steel 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 Green Cross and Moonbae Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Green Cross Medical and Moonbae Steel, you can compare the effects of market volatilities on Green Cross and Moonbae Steel 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 Green Cross with a short position of Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Moonbae Steel.

Diversification Opportunities for Green Cross and Moonbae Steel

0.32

Correlation Coefficient

Green Cross  Moonbae Steel

Weak diversification

The 3 months correlation between Green and Moonbae is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel and Green Cross 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 Green Cross Medical are associated (or correlated) with Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of Green Cross i.e., Green Cross and Moonbae Steel go up and down completely randomly.

Pair Corralation between Green Cross and Moonbae Steel

Assuming the 90 days trading horizon Green Cross is expected to generate 1.43 times less return on investment than Moonbae Steel. In addition to that, Green Cross is 1.11 times more volatile than Moonbae Steel. It trades about 0.06 of its total potential returns per unit of risk. Moonbae Steel is currently generating about 0.09 per unit of volatility. If you would invest  224,107  in Moonbae Steel on December 24, 2024 and sell it today you would earn a total of  28,393  from holding Moonbae Steel or generate 12.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Green Cross Medical  vs.  Moonbae Steel

Green Cross Medical

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Green Cross Medical are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Green Cross may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Moonbae Steel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moonbae Steel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Moonbae Steel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Green Cross and Moonbae Steel

The main advantage of trading using opposite Green Cross and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Moonbae Steel 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.

The idea behind Green Cross Medical and Moonbae Steel 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.