Correlation Between GREENX METALS and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both GREENX METALS and Lundin Mining 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 Lundin Mining 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 Lundin Mining, you can compare the effects of market volatilities on GREENX METALS and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Lundin Mining.
Diversification Opportunities for GREENX METALS and Lundin Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GREENX and Lundin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of GREENX METALS i.e., GREENX METALS and Lundin Mining go up and down completely randomly.
Pair Corralation between GREENX METALS and Lundin Mining
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.94 times more return on investment than Lundin Mining. However, GREENX METALS is 1.94 times more volatile than Lundin Mining. It trades about 0.1 of its potential returns per unit of risk. Lundin Mining is currently generating about -0.26 per unit of risk. If you would invest 37.00 in GREENX METALS LTD on September 24, 2024 and sell it today you would earn a total of 3.00 from holding GREENX METALS LTD or generate 8.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GREENX METALS LTD vs. Lundin Mining
Performance |
Timeline |
GREENX METALS LTD |
Lundin Mining |
GREENX METALS and Lundin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GREENX METALS and Lundin Mining
The main advantage of trading using opposite GREENX METALS and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.GREENX METALS vs. CORONGLRES CDIS101 | GREENX METALS vs. MONGOLIAN MINING CRPREGS | GREENX METALS vs. PERENNIAL ENERGY HD 01 | GREENX METALS vs. AJ LUCAS GROUP |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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