Correlation Between GREENX METALS and Ecora Resources

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

Diversification Opportunities for GREENX METALS and Ecora Resources

-0.46

Correlation Coefficient

GREENX METALS  Ecora Resources

Very good diversification

The 3 months correlation between GREENX and Ecora is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Ecora Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecora Resources 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 Ecora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecora Resources PLC has no effect on the direction of GREENX METALS i.e., GREENX METALS and Ecora Resources go up and down completely randomly.

Pair Corralation between GREENX METALS and Ecora Resources

Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.92 times more return on investment than Ecora Resources. However, GREENX METALS is 1.92 times more volatile than Ecora Resources PLC. It trades about 0.01 of its potential returns per unit of risk. Ecora Resources PLC is currently generating about -0.05 per unit of risk. If you would invest  53.00  in GREENX METALS LTD on October 4, 2024 and sell it today you would lose (12.00) from holding GREENX METALS LTD or give up 22.64% of portfolio value over 90 days.

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

GREENX METALS LTD  vs.  Ecora Resources PLC

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 February 2025.

Ecora Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GREENX METALS and Ecora Resources

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

The idea behind GREENX METALS LTD and Ecora Resources 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.