Correlation Between GREENX METALS and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on GREENX METALS and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Commercial Vehicle.
Diversification Opportunities for GREENX METALS and Commercial Vehicle
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GREENX and Commercial is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of GREENX METALS i.e., GREENX METALS and Commercial Vehicle go up and down completely randomly.
Pair Corralation between GREENX METALS and Commercial Vehicle
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.17 times more return on investment than Commercial Vehicle. However, GREENX METALS is 1.17 times more volatile than Commercial Vehicle Group. It trades about -0.01 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.1 per unit of risk. If you would invest 45.00 in GREENX METALS LTD on October 10, 2024 and sell it today you would lose (3.00) from holding GREENX METALS LTD or give up 6.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GREENX METALS LTD vs. Commercial Vehicle Group
Performance |
Timeline |
GREENX METALS LTD |
Commercial Vehicle |
GREENX METALS and Commercial Vehicle Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GREENX METALS and Commercial Vehicle
The main advantage of trading using opposite GREENX METALS and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.GREENX METALS vs. EVS Broadcast Equipment | GREENX METALS vs. QUEEN S ROAD | GREENX METALS vs. NAGOYA RAILROAD | GREENX METALS vs. TRAINLINE PLC LS |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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