Correlation Between Abingdon Health and Greenroc Mining

Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Greenroc 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 Abingdon Health and Greenroc Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abingdon Health Plc and Greenroc Mining PLC, you can compare the effects of market volatilities on Abingdon Health and Greenroc 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 Abingdon Health with a short position of Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Greenroc Mining.

Diversification Opportunities for Abingdon Health and Greenroc Mining

0.6

Correlation Coefficient

Abingdon Health  Greenroc Mining

Poor diversification

The 3 months correlation between Abingdon and Greenroc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining PLC and Abingdon Health 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 Abingdon Health Plc are associated (or correlated) with Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Abingdon Health i.e., Abingdon Health and Greenroc Mining go up and down completely randomly.

Pair Corralation between Abingdon Health and Greenroc Mining

Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 0.73 times more return on investment than Greenroc Mining. However, Abingdon Health Plc is 1.38 times less risky than Greenroc Mining. It trades about -0.04 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.19 per unit of risk. If you would invest  775.00  in Abingdon Health Plc on December 2, 2024 and sell it today you would lose (50.00) from holding Abingdon Health Plc or give up 6.45% of portfolio value over 90 days.

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

Abingdon Health Plc  vs.  Greenroc Mining PLC

Abingdon Health Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abingdon Health Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Abingdon Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Greenroc Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenroc Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Abingdon Health and Greenroc Mining

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

The idea behind Abingdon Health Plc and Greenroc Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.