Correlation Between GREENX METALS and Carnival Plc

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

Diversification Opportunities for GREENX METALS and Carnival Plc

-0.5

Correlation Coefficient

GREENX METALS  Carnival Plc

Very good diversification

The 3 months correlation between GREENX and Carnival is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Carnival plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival plc 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 Carnival Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival plc has no effect on the direction of GREENX METALS i.e., GREENX METALS and Carnival Plc go up and down completely randomly.

Pair Corralation between GREENX METALS and Carnival Plc

Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 0.83 times more return on investment than Carnival Plc. However, GREENX METALS LTD is 1.2 times less risky than Carnival Plc. It trades about 0.07 of its potential returns per unit of risk. Carnival plc is currently generating about -0.11 per unit of risk. If you would invest  41.00  in GREENX METALS LTD on October 9, 2024 and sell it today you would earn a total of  1.00  from holding GREENX METALS LTD or generate 2.44% return on investment over 90 days.

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

GREENX METALS LTD  vs.  Carnival plc

GREENX METALS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENX METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Carnival plc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carnival plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Carnival Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GREENX METALS and Carnival Plc

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

The idea behind GREENX METALS LTD and Carnival plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.