Correlation Between BKI Investment and GreenX Metals

Can any of the company-specific risk be diversified away by investing in both BKI Investment 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 BKI Investment and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BKI Investment and GreenX Metals, you can compare the effects of market volatilities on BKI Investment 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 BKI Investment with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and GreenX Metals.

Diversification Opportunities for BKI Investment and GreenX Metals

0.06

Correlation Coefficient

BKI Investment  GreenX Metals

Significant diversification

The 3 months correlation between BKI and GreenX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and BKI Investment 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 BKI Investment 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 has no effect on the direction of BKI Investment i.e., BKI Investment and GreenX Metals go up and down completely randomly.

Pair Corralation between BKI Investment and GreenX Metals

Assuming the 90 days trading horizon BKI Investment is expected to generate 117.47 times less return on investment than GreenX Metals. But when comparing it to its historical volatility, BKI Investment is 2.35 times less risky than GreenX Metals. It trades about 0.0 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  67.00  in GreenX Metals on December 23, 2024 and sell it today you would earn a total of  19.00  from holding GreenX Metals or generate 28.36% return on investment over 90 days.

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

BKI Investment  vs.  GreenX Metals

BKI Investment

Risk-Adjusted Performance

Very Weak

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

GreenX Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GreenX Metals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GreenX Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BKI Investment and GreenX Metals

The main advantage of trading using opposite BKI Investment and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment 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' long position.

The idea behind BKI Investment and GreenX Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.