Correlation Between GREENX METALS and British American

Can any of the company-specific risk be diversified away by investing in both GREENX METALS and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on GREENX METALS and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and British American.

Diversification Opportunities for GREENX METALS and British American

-0.72

Correlation Coefficient

GREENX METALS  British American

Pay attention - limited upside

The 3 months correlation between GREENX and British is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of GREENX METALS i.e., GREENX METALS and British American go up and down completely randomly.

Pair Corralation between GREENX METALS and British American

Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the British American. In addition to that, GREENX METALS is 4.47 times more volatile than British American Tobacco. It trades about -0.01 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.13 per unit of volatility. If you would invest  2,468  in British American Tobacco on September 24, 2024 and sell it today you would earn a total of  1,007  from holding British American Tobacco or generate 40.8% return on investment over 90 days.

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

GREENX METALS LTD  vs.  British American Tobacco

GREENX METALS LTD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GREENX METALS LTD are ranked lower than 2 (%) 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 January 2025.

British American Tobacco

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in British American Tobacco are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, British American is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GREENX METALS and British American

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

The idea behind GREENX METALS LTD and British American Tobacco 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.