Correlation Between GREENX METALS and News

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

Diversification Opportunities for GREENX METALS and News

-0.47

Correlation Coefficient

GREENX METALS  News

Very good diversification

The 3 months correlation between GREENX and News is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of GREENX METALS i.e., GREENX METALS and News go up and down completely randomly.

Pair Corralation between GREENX METALS and News

Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the News. In addition to that, GREENX METALS is 3.17 times more volatile than News Corporation. It trades about -0.01 of its total potential returns per unit of risk. News Corporation is currently generating about 0.08 per unit of volatility. If you would invest  2,231  in News Corporation on September 24, 2024 and sell it today you would earn a total of  429.00  from holding News Corporation or generate 19.23% 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.  News Corp.

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.

News

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in News Corporation are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, News may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GREENX METALS and News

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

The idea behind GREENX METALS LTD and News Corporation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..