Correlation Between Science Applications and GREENX METALS

Can any of the company-specific risk be diversified away by investing in both Science Applications and GREENX METALS 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 Science Applications and GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Science Applications International and GREENX METALS LTD, you can compare the effects of market volatilities on Science Applications and GREENX METALS 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 Science Applications with a short position of GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and GREENX METALS.

Diversification Opportunities for Science Applications and GREENX METALS

0.74

Correlation Coefficient

Science Applications  GREENX METALS

Poor diversification

The 3 months correlation between Science and GREENX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD and Science Applications 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 Science Applications International are associated (or correlated) with GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Science Applications i.e., Science Applications and GREENX METALS go up and down completely randomly.

Pair Corralation between Science Applications and GREENX METALS

Assuming the 90 days trading horizon Science Applications International is expected to under-perform the GREENX METALS. But the stock apears to be less risky and, when comparing its historical volatility, Science Applications International is 2.03 times less risky than GREENX METALS. The stock trades about -0.27 of its potential returns per unit of risk. The GREENX METALS LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  40.00  in GREENX METALS LTD on October 5, 2024 and sell it today you would earn a total of  1.00  from holding GREENX METALS LTD or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Science Applications Internati  vs.  GREENX METALS LTD

Science Applications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Science Applications International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GREENX METALS LTD

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GREENX METALS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, GREENX METALS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Science Applications and GREENX METALS

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

The idea behind Science Applications International and GREENX METALS LTD 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.