Correlation Between GREENX METALS and MSCI

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

By analyzing existing cross correlation between GREENX METALS LTD and MSCI Inc, you can compare the effects of market volatilities on GREENX METALS and MSCI 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 GREENX METALS with a short position of MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and MSCI.

Diversification Opportunities for GREENX METALS and MSCI

0.27

Correlation Coefficient

GREENX METALS  MSCI

Modest diversification

The 3 months correlation between GREENX and MSCI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc and GREENX 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 GREENX METALS LTD are associated (or correlated) with MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of GREENX METALS i.e., GREENX METALS and MSCI go up and down completely randomly.

Pair Corralation between GREENX METALS and MSCI

Assuming the 90 days trading horizon GREENX METALS is expected to generate 1.51 times less return on investment than MSCI. In addition to that, GREENX METALS is 3.53 times more volatile than MSCI Inc. It trades about 0.02 of its total potential returns per unit of risk. MSCI Inc is currently generating about 0.12 per unit of volatility. If you would invest  52,096  in MSCI Inc on September 1, 2024 and sell it today you would earn a total of  5,644  from holding MSCI Inc or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

GREENX METALS LTD  vs.  MSCI Inc

GREENX METALS LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GREENX METALS LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, GREENX METALS may actually be approaching a critical reversion point that can send shares even higher in December 2024.

MSCI Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MSCI may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with GREENX METALS and MSCI

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

The idea behind GREENX METALS LTD and MSCI Inc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.